ST. LOUIS - Spartech Corp., North America's largest sheet extrusion company, received a stock buy recommendation from Huntleigh Securities Corp. The St. Louis equity research firm cited several factors: acquisition strategy, an increasing demand for plastic products and expanding margins.
Spartech of Clayton, Mo., recently agreed to buy custom extruder Portage Industries Corp. of Portage, Wis. The deal is expected to close by May 1.
Sales increased 10 percent, to $87.5 million, in the first quarter, ended Feb. 3.
``While 1996 earnings should show only about a 13 percent increase over the level achieved in 1995 because of a higher tax rate, we anticipate that Spartech will achieve 15-20 percent growth in the future,'' said Huntleigh analyst Michael H. Schneider.
Potential risk factors include an economic slowdown, acquisition risk and higher raw material prices, he said.
