GRA - W.R. Grace: Leading Firm With An Undervalued Stock Price

This week, we’ve found a company that should not only beat short-term earnings expectations (based on our Earnings Distortion Score), but has improving fundamentals, multiple growth opportunities, and an undervalued stock price. W.R. Grace & Company (GRA) is this week’s Long Idea.

Earnings Distortion Score: Beat

GRA earns our “Beat” Earnings Distortion Score because our adjusted measure of core earnings shows GRA’s earnings are understated based on unusual expenses missed in IBES’s Street Earnings and Compustat’s Income Before Special Items (as featured in this Harvard Business School and MIT Sloan paper).