Northern Technologies International (NASDAQ:NTIC) shares rose 13% after generating stronger than expected results for the second quarter of FY2018. NTIC share price grew 40% in the last twelve months – with a 52-week trading range of $14.95 – $27.00. Trader’s confidence in its financial numbers and future fundamentals support the stock price uptrend.
A leading developer of corrosion inhibiting products, as well as bio-based and biodegradable polymer resin compounds, Northern Technologies International posted a sales growth of 40% in the latest quarter with a record level of $12,214,000. The company continues experiencing robust demand for its ZERUST and Natur-Tec products.
Its net income also hit a new record level in the second quarter. The company’s net income landed around $0.29 per diluted share, representing a staggering growth of 222.2%.
The company has been experiencing strong demand from Chinese markets. G. Patrick Lynch, President and Chief Executive Officer of NTIC commented: “I’m also very encouraged by the 82.6% sales to increase in NTIC China over the prior fiscal year period and nearly 10% growth from the first quarter of fiscal 2018. Higher net sales combined with stable expenses drove significant improvements in profitability.”
Northern Technologies International also offers a quarterly dividend of $0.10 per share, yielding around 1%. Its dividends look completely safe considering its financial numbers and cash generation potential. The company has no debt on its balance sheet, while its working capital stands around $22,194,000, including $5,067,000 in cash and cash equivalents.
Northern Technologies International expects to extend the momentum into the following quarters. It has increased sales guidance for the full year to $49 million, compared to the prior guidance of $46 million. Northern Technologies also raised its earnings expectations to $1.45 per share from the earlier estimate of $1.10 per share. Robust growth in financial numbers also supports its valuations. Its stock trades around 2.74 times to sales and 26 times to earnings.
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