New Lifetime High Reached By NewMarket (NEU)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified NewMarket ( NEU) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified NewMarket as such a stock due to the following factors:

  • NEU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.2 million.
  • NEU has traded 339 shares today.
  • NEU is trading at a new lifetime high.

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More details on NEU:

NewMarket Corporation, through its subsidiaries, engages in the petroleum additives businesses. The stock currently has a dividend yield of 1.2%. NEU has a PE ratio of 24. Currently there are no analysts that rate NewMarket a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for NewMarket has been 36,600 shares per day over the past 30 days. NewMarket has a market cap of $5.7 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 0.53 and a short float of 9% with 24.06 days to cover. Shares are up 13.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates NewMarket as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.84, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, NEU has a quick ratio of 1.64, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Chemicals industry and the overall market, NEWMARKET CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • NEWMARKET CORP has improved earnings per share by 16.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NEWMARKET CORP increased its bottom line by earning $18.37 versus $18.21 in the prior year. This year, the market expects an improvement in earnings ($19.65 versus $18.37).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 11.2% when compared to the same quarter one year prior, going from $57.52 million to $63.95 million.
  • Net operating cash flow has significantly increased by 1190.84% to $56.55 million when compared to the same quarter last year. In addition, NEWMARKET CORP has also vastly surpassed the industry average cash flow growth rate of 16.45%.

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