Electrification of cars has not been a huge tailwind for just Magnificent Seven stocks like Tesla. Among the lesser-known players in this growth market is specialty chemicals maker Aspen Aerogels, shares of which have nearly doubled in price this year. Meanwhile, Tesla stock is trading 11% below its closing price for 2023.
Aspen Aerogels is today's selection for IBD 50 Growth Stocks To Watch. Shares are trying to rise past a cup base's buy point of 31.74. The relative strength line has picked up and is at a new high, according to IBD MarketSurge.
Analysts polled by FactSet expect earnings of 21 cents per share in 2024 — a 132% increase in profit estimates.
Shares rose 16% after second-quarter results on Aug. 7. Sales rose 145% from the prior year to $117.8 million, while earnings of 21 cents per share reversed a 22-cent loss from the prior year.
The company also raised its full-year outlook to $390 million in revenue, up from $380 million, and earnings of 9 cents per share, up from 3 cents.
Aspen Aerogels' High Relative Strength Rating
Aspen Aerogels makes chemicals and products that improve lithium-ion batteries for electric-vehicle use.
The stock boasts an ideal Relative Strength Rating of 99 while the Composite Rating of 91 is also impressive. The EPS Rating lags at 76. Investor's Business Daily recommends ratings that are 80 or higher. Aspen Aerogels ranks second in the specialty chemicals group.
While buying interest remains strong, going by the up/down volume ratio of 1.2, shares are in a third-stage base, which could net lower gains.
On the plus side, mutual funds own 51% of outstanding shares. And more funds have been buying shares in recent weeks, giving Aspen Aerogels stock a high Accumulation/Distribution Rating of A-.
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