Darling Ingredients Inc. (DAR)

(A Top Pick Jan 20/22, Down 10%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with DAR has triggered its stop at $60. To remain disciplined, we recommend covering the position at this time. This results in a net investment loss of 15.4%, when combined with the previous buy recommendation.

Stockchase Research Editor: Michael O’Reilly We reiterate DAR, a producer of ingredients made from edible and non-edible bio-nutrients to be used in pharmaceuticals, pet foods, renewable diesel and even fertilizers as a TOP PICK It trades at 21x earnings compared to peers at 32x, but with a strong outlook by analysts for growth in earnings its projected PEG ratio is less than 1.0. Its recently reported EPS beat analyst expectations and it is managing an ROE over 17%. We also like the strategy of paying down debt, buying back shares, while maintaining cash reserves. We continue to recommend a stop loss at $60, looking to achieve $96 - upside potential over 43%. Yield 0% (Analysts’ price target is $96.83)

Stockchase Research Editor: Michael O'Reilly DAR produces ingredients made from edible and non-edible bio-nutrients to be used in pharmaceuticals, pet foods, renewable diesel and even fertilizers. It trades at 27x earnings compared to peers at 30x, but with an outlook by analysts for another 45% increase in earnings next year its projected PE is only 15x. Its recently reported EPS of $1.17 beat expectations of $0.82 quite handily, based on revenues that were up over 40%. Raymond James just initiated coverage with a strong buy to $95 targets. We would buy this with a stop loss at $60, looking to achieve $91 -- upside potential over 18%. Yield 0% (Analysts’ price target is $91.10)