This Jewel of a Stock Bucking the Trend

If you find a stock that’s doing well in this market, you might very well just have a jewel on your hands.

Broader market action is so bad right now that anything bucking the trend must have significant new buying interest from institutional investors.

One stock that’s really distinguishing itself in this market is Balchem Corporation (NASDAQ/BCPC). I wrote about this company in this column back in April.

Balchem is a small-cap company that’s been outperforming the market since the credit crisis started last year. It hasn’t been a high flyer, but rather a consistent grower on the stock market.

This company specializes in selling ingredients and products for the food, nutrition, feed, pharmaceutical, and medical sterilization industries worldwide. Balchem sells highly specialized products, including sophisticated chemical and nutrients that go in foods, feed supplies, and products that help sterilize surgical equipment. Balchem has four main businesses: ARC Specialty Products, Food, Pharma & Human Nutrition, BCP Ingredients Inc., and Animal Nutrition & Health.

In its first quarter this year, Balchem generated record revenues of almost fifty-seven million dollars, representing impressive growth of 106% over revenues of over twenty-seven and a half million dollars generated in the first quarter last year. Some of this growth was due to recent acquisitions.

The company also generated record net earnings during the quarter of $4.6 million, representing growth of some $1.2 million, or 35%, over net income generated in the comparable quarter last year.

One of the main reasons why this company is successful is because, in most of its business lines, it’s able to pass rising raw material costs on to customers. Balchem’s profitability is particularly impressive when you consider how price-sensitive customers in the food and feed industries are.

It’s easy to watch the main stock market averages and get discouraged as an investor. When I see companies like Balchem bucking the trend, it restores my resolve for what I know will be a difficult road ahead.