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Kraton (KRA) and Cereplast (OTCMKTS:CERPQ) Head-To-Head Contrast

Cereplast (OTCMKTS:CERPQ) and Kraton (NYSE:KRA) are both small-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, risk, profitability and dividends.

Volatility and Risk

Cereplast has a beta of -2.91, indicating that its share price is 391% less volatile than the S&P 500. Comparatively, Kraton has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Cereplast and Kraton, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cereplast 0 0 0 0 N/A
Kraton 1 2 1 0 2.00

Kraton has a consensus price target of $45.67, indicating a potential upside of 129.02%. Given Kraton’s higher probable upside, analysts plainly believe Kraton is more favorable than Cereplast.

Valuation & Earnings

This table compares Cereplast and Kraton’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cereplast N/A N/A N/A N/A N/A
Kraton $1.96 billion 0.33 $97.54 million $2.85 7.00

Kraton has higher revenue and earnings than Cereplast.

Profitability

This table compares Cereplast and Kraton’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cereplast N/A N/A N/A
Kraton 5.87% 14.83% 3.48%

Insider and Institutional Ownership

96.1% of Kraton shares are held by institutional investors. 1.1% of Cereplast shares are held by insiders. Comparatively, 3.7% of Kraton shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Kraton beats Cereplast on 9 of the 9 factors compared between the two stocks.

Cereplast Company Profile

Cereplast, Inc. develops and commercializes bio-based resins. It provides Cereplast Compostables resins, which are compostable, bio-based, and ecologically sound substitutes for petroleum-based plastics targeting compostable bags, single-use food service products, and packaging applications. The company also offers Cereplast Sustainables resins, including Cereplast Hybrid resins that replace up to 55% of the petroleum content in conventional plastics with bio-based materials, such as industrial starches sourced from plants that are used in automotive, consumer goods, consumer electronics, medical, packaging, and construction markets; and Cereplast Algae Plastic resins, which transforms algae into bioplastics. Its compostable and sustainable resins are used in injection molding, thermoforming, blown films, blow molding, extrusion for profiles, and extrusion coating. The company was formerly known as Biocorp North America Inc. and changed its name to Cereplast, Inc. in March 2005. Cereplast, Inc. was incorporated in 2001 and is headquartered in Seymour, Indiana. On March 27, 2014, the voluntary petition of Cereplast, Inc. for reorganization under Chapter 11 was converted to Chapter 7. It had filed for Chapter 11 bankruptcy on February 10, 2014.Cereplast, Inc. is in Liquidation.

Kraton Company Profile

Kraton Corporation manufactures and sells styrenic block copolymers and other engineered polymers in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in two segments, Polymer and Chemical. The Polymer segment offers performance products, including styrene-butadiene-styrene and styrene-isoprene-styrene; and specialty polymers, such as hydrogenated styrenic block copolymers, as well as isoprene rubber and isoprene rubber latex for use in medical and personal care products, adhesives, tackifiers, paints, and coatings. The Chemical segment provides pine-based specialty products that include rosin-based tackifiers for packaging and pressure-sensitive adhesive applications; terpene-based tackifiers for bookbinding, hygiene, and pressure-sensitive adhesive applications; alpha-methyl-styrene (AMS) resins for bookbinding and pressure-sensitive adhesive applications; and hot melt polyamides for flexible packaging. It also provides rosin-based binders for the thermoplastic pavement marking submarket; sells tall oil fatty acids for the asphalt paving market; and produces rosin esters and insoluble maleic-based tackifiers, as well as bitumen additives. In addition, this segment offers terpene-based tread enhancement resins and AMS-based tread enhancement additives, as well as distilled tall oil and rosins for enhancing the performance and manufacturing of high performance, winter, and all-season tires. Further, it provides dimer acids, tall oil rosins, and terpene fractions for fuel additive, oilfield chemical, mining fluid, coating, metalworking fluid and lubricant, and other applications. The company sells its products through various channels, including direct sales force, marketing representatives, and distributors under the Kraton and Cariflex brands. The company was formerly known as Kraton Performance Polymers, Inc. and changed its name to Kraton Corporation in September 2016. Kraton Corporation is based in Houston, Texas.

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