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Pollution Control Stocks to Watch on May 5: CCC, ERII

In the Jan-Mar 2016 quarter, macro headwinds, including economic uncertainties in some developed and emerging nations, soft commodity prices and forex woes, played spoilsport for many industries, including Industrial Products.

According to the Zacks Industry classification, Pollution Control is broadly grouped under Industrial Products, one of the 16 broad Zacks sectors. Below we briefly discuss the broader sectors’ earnings trend so far in the Jan-Mar quarter.

As of Apr 29, roughly 81% of industrial products stocks (accounting for 2% of the S&P 500 index’s total market capitalization) in the S&P 500 Group had  reported results for the Jan-Mar quarter, recording a decline of 24.1% in earnings and 9.3% in revenue.

Taking into consideration the prevalent headwinds, earnings for the Industrial Products sector are expected to decline 23.4% in the quarter; while revenues will likely fall 9.4%.

What’s in Store for 2 Pollution Control Stocks-CCC, ERII?

Below we discuss briefly the expectations from the upcoming results (Jan-Mar quarter) for two Pollution Control stocks:

Calgon Carbon Corporation CCC: This pollution control company is slated to release its first-quarter 2016 results on May 5, before the market opens. In the four trailing quarters, the company reported below-expected results in three while matching estimates in one with an average negative earnings surprise of 5.49%.



Our proven model does not conclusively show that Calgon Carbon is likely to beat earnings this quarter. This is because the company lacks the right combination of two key ingredients — a positive Earnings ESP (the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold). The company currently carries a Zacks Rank #4 (Sell) and a +25.00% Earnings ESP. Over the last 60 days, the Zacks Consensus Estimate for the stock has increased 6.7% to 16 cents for first-quarter 2016.

Energy Recovery, Inc. ERII: This pollution control stock is slated to release its first-quarter 2016 results on May 5, after the market closes. The company reported lower-than-expected results in two of the four trailing quarters, while posting in line results in the other two with an average negative earnings surprise of 76.30%.



Our proven model does not conclusively show that Energy Recovery will beat estimates this quarter because it currently carries a Zacks Rank #3 and a 0.00% Earnings ESP. The Zacks Consensus Estimate for the stock is currently pegged at a loss of 3 cents per share for first-quarter 2016.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
CALGON CARBON (CCC): Free Stock Analysis Report
 
ENERGY RECOVERY (ERII): Free Stock Analysis Report
 
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