Opinions
David Driscoll
Balchem Corp
BCPC-Q
TOP PICK
Nov 08, 2013
$54.150
Stock price when the opinion was issued
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PAST TOP PICK
(BNN had the date as Nov 28/13, but I show Nov 8/13.) (A Top Pick Nov 8/13. Down 9.15%.) Made an acquisition that is going to be accretive to their earnings and the stock shot up to $67, but that was because it hit 1.5 billion in market and all the ETFs had to pile in. It has settled back down again. Make choline chloride, a vitamin B supplement, which goes into our drinks and also helps increase yield for dairy cows. Also used for fracing in the oil/gas industry.
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BUY ON WEAKNESS
They make specialty ingredients and vitamin B12, needed for babies' growth and to fatten livestock. Their last quarter showed surprisingly growth in 5 of 6 divisions and profits rising. Its PE is high at 36x, so step in during a pullback. Dividend growth is 10% in the past 5 years, so cash flow is strong. They haven't relied on their oil and gas business, which is good, but other divisions.
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TOP PICK
Choline product necessary to humans and animals. Also make a purifier for when you don't have water. Through Covid, EBITDA, revenue, and EPS all increased. Grow through acquisition and organically. Prudent with the debt they take on. About 12% free cash flow growth per year. Smart management team. Yield is 0.54%. (Analysts’ price target is $109.25)
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(He recommends you take a half position only because these Top Picks are trading at multiples that are higher than average, but are still attractive as long-term investments.) A specialties chemical firm. Make choline chloride, which goes into feedstock for cattle and chickens. Also, chemicals for foodstuffs, as well as improving milk content in dairy cows. Free cash flow has consistently risen for the last decade. Dividends have been growing at a 20% clip. Yield is very small so he has been buying it for his clients’ grandchildren. This is one you can buy and hold for a long period of time.