This unknown name has caught investors by surprise
Balchem, which saw shares soar this week, has cornered the area of nutrients for human and animal food.
Balchem develops and manufactures key nutrients as ingredients for both human and animal food, such as choline, also known as vitamin B4. The company popped big this week on the market after the announcement of its acquisition of Specialty Effects, a company whose model and technology fit in extremely well with Balchem's current offerings.
This is an enormous acquisition for Balchem, as Specialty Effects represents approximately 35 percent of Balchem's current size. The deal is all cash as well, which shows a lot of confidence by management that the acquisition will be immediately accretive to earnings.
In this video from today's Stock of the Day, host Mark Reeth and Motley Fool analyst Sara Hov talk investors through this lesser-followed business and its massive acquisition this week. Sara also discusses why even after the 23 percent price jump, she still loves the business and its growth prospects from here. She tells investors several reasons why Balchem taking on debt to fund this cash acquisition doesn't worry her, why she sees the acquisition as a great one, and why the stock is a buy today.
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