There is no way Element Solutions Inc (ESI) can keep these numbers up

Element Solutions Inc (NYSE: ESI) stock jumped 2.38% on Thursday to $19.80 against a previous-day closing price of $19.34. With 1.09 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.44 million shares. During the session, the Specialty Chemicals company that operates in wider Basic Materials sector, reached to the highest price of $19.89 whereas the lowest price it dropped to was $19.40. The 52-week range on ESI shows that it touched its highest point at $21.90 and its lowest point at $15.31 during that stretch. It currently has a 1-year price target of $22.70. With its current market cap of 4.87 billion, ESI has annualized dividend of $0.32 while the current yield stands at 1.62%. Beta for the stock currently stands at 1.31.

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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 -3.60%, but this was up by 0.25% over a month. Three-month performance surged to 4.60% while six-month performance rose 6.62%. The stock gained 5.66% in the past year, while it has gained 8.85% so far this year. A look at the trailing 12-month EPS for ESI yields 0.56 with Next year EPS estimates of 1.51. For the next quarter, that number is 0.33. This implies an EPS growth rate of -7.90% for this year and 15.36% for next year. EPS is expected to grow by 7.49% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 23.80%.

Float and Shares Shorts:

At present, 241.40 million ESI shares are outstanding with a float of 222.72 million shares on hand for trading. On Aug 30, 2023, short shares totaled 4.3 million, which was 1.78% higher than short shares on Jul 30, 2023. 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 92.98% of ESI’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 53.46% of ESI, in contrast to 39.72% held by mutual funds. Shares owned by individuals account for 14.66%. As the largest shareholder in ESI with 8.85% of the stake, The Vanguard Group, Inc. holds 21,363,430 shares worth 21,363,430. A second-largest stockholder of ESI, T. Rowe Price Investment Manageme, holds 17,267,724 shares, controlling over 7.15% of the firm’s shares. Fidelity Management & Research Co is the third largest shareholder in ESI, holding 13,919,454 shares or 5.76% stake. With a 2.79% stake in ESI, the Vanguard Total Stock Market ETF is the largest stakeholder. A total of 6,742,429 shares are owned by the mutual fund manager. The Vanguard Small Cap Index Fund, which owns about 2.33% of ESI stock, is the second-largest Mutual Fund holder. It holds 5,635,830 shares valued at 118.13 million. T Rowe Price Small Cap Stock Fund holds 1.95% of the stake in ESI, owning 4,697,767 shares worth 98.47 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2023, ESI reported revenue of $676.90M and operating income of $90.50M. The EBITDA in the recently reported quarter was $138.60M and diluted EPS was $0.26.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ESI since 0 analysts follow the stock currently. 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 $25.00 and a low target of $17.00, the average target price over the next 12 months is $22.70. Based on these targets, ESI could surge 26.26% to reach the target high and fall by -14.14% to reach the target low. Reaching the average price target will result in a growth of 14.65% 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.

Summary of Insider Activity:

Insiders traded ESI stock several times over the past three months with 1 Buys and 1 Sells. In these transactions, 400,000 shares were bought while 400,000 shares were sold. The number of buy transactions has increased to 29 while that of sell transactions has risen to 26 over the past year. The total number of shares bought during that period was 1,757,434 while 778,428 shares were sold.

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