Koppers Holdings (NYSE: KOP) provides carbon compounds and commercial wood treatment products to the aluminum, railroad, specialty chemical, utility, rubber and steel industries. Its Carbon Materials and Chemicals unit manufactures carbon pitch, phthalic anhydride, creosote, carbon black, furnace coke, refined tars and specialty chemicals. The Railroad and Utility Products segment treats wood for vineyard and construction uses and supplies treated crossties and utility poles. Koppers serves markets in North America, Australia, the United Kingdom and Scandinavia.
The firm pleased investors last week, when it reported Q4 EPS of 44 cents and revenues of $326.8 million. Analysts had been expecting 38 cents and $310.9 million. Management also guided FY08 revenues to about $1.39-$1.43 billion ($1.41B consensus) and approved a $75 million share repurchase program.
KOP shares popped on the news and are now forming a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the shares with one "buy" and three "holds". The KOP P/E ratio (15.20), Price to Sales ratio (0.65), Price to Cash Flow ratio (9.32), Return on Assets (9.02%) and Return on Investment (13.06%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 89% of the outstanding shares. Over the past 52 weeks, the stock has traded between $23.12 and $46.91. A stop-loss of $35.75 looks good here.