Does Element Solutions Inc (ESI) offer a good opportunity for investors?

Element Solutions Inc (NYSE: ESI) stock fell -1.56% on Friday to $17.63 against a previous-day closing price of $17.91. With 1.27 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.2 million shares. During the session, the Specialty Chemicals company that operates in wider Basic Materials sector, reached to the highest price of $18.33 whereas the lowest price it dropped to was $17.62. The 52-week range on ESI shows that it touched its highest point at $26.92 and its lowest point at $16.25 during that stretch. It currently has a 1-year price target of $25.89. With its current market cap of 4.46 billion, ESI has annualized dividend of $0.32 while the current yield stands at 1.82%. Beta for the stock currently stands at 1.38.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ESI was down-trending over the past week, with a drop of -4.81%, but this was down by -8.94% over a month. Three-month performance dropped to -2.27% while six-month performance fell -21.36%. The stock lost -14.58% in the past year, while it has lost -27.39% so far this year. A look at the trailing 12-month EPS for ESI yields 0.65 with Next year EPS estimates of 1.75. For the next quarter, that number is 0.38. This implies an EPS growth rate of 166.50% for this year and 14.58% for next year. EPS is expected to grow by 26.30% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 26.90%.

Float and Shares Shorts:

At present, 247.10 million ESI shares are outstanding with a float of 227.43 million shares on hand for trading. On Jul 14, 2022, short shares totaled 2.41 million, which was 0.97% higher than short shares on Jun 14, 2022. In addition to Sir Martin Ellis Franklin as the firm’s Founder & Exec. Chairman, Mr. Benjamin Gliklich serves as its CEO, Pres & Director.


Institutional Ownership:

Through their ownership of 99.10% of ESI’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 8.13% of ESI, in contrast to 54.34% held by mutual funds. Shares owned by individuals account for 37.06%. As the largest shareholder in ESI with 8.90% of the stake, T. Rowe Price Associates, Inc. holds 21,844,504 shares worth 21,844,504. A second-largest stockholder of ESI, The Vanguard Group, Inc., holds 21,582,765 shares, controlling over 8.80% of the firm’s shares. Wellington Management Co. LLP is the third largest shareholder in ESI, holding 14,582,025 shares or 5.94% stake. With a 2.84% stake in ESI, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 6,961,824 shares are owned by the mutual fund manager. The Hartford Mid Cap Fund, which owns about 2.57% of ESI stock, is the second-largest Mutual Fund holder. It holds 6,300,477 shares valued at 117.63 million. Vanguard Small Cap Index Fund holds 2.43% of the stake in ESI, owning 5,954,447 shares worth 111.17 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ESI since 10 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 2 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ESI analysts setting a high price target of $30.00 and a low target of $22.00, the average target price over the next 12 months is $25.89. Based on these targets, ESI could surge 70.16% to reach the target high and rise by 24.79% to reach the target low. Reaching the average price target will result in a growth of 46.85% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ESI will report FY 2022 earnings on 02/21/2023. Analysts have provided yearly estimates in a range of $1.54 being high and $1.48 being low. For ESI, this leads to a yearly average estimate of $1.53. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Element Solutions Inc surprised analysts by $0.02 when it reported $0.38 EPS against a consensus estimate of $0.36. The surprise factor in the prior quarter was $0.03. Based on analyst estimates, the high estimate for the next quarter is $0.39 and the low estimate is $0.37. The average estimate for the next quarter is thus $0.38.

Summary of Insider Activity:

Insiders traded ESI stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 30 while that of sell transactions has risen to 24 over the past year. The total number of shares bought during that period was 2,763,356 while 1,204,299 shares were sold.

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