Investopedia: Darling: Dirty Business, Sweet Cash Flow

Well-known fund manager Peter Lynch once wrote that he often knew he had found an interesting investment opportunity when the company in question performed a service that was unpleasant or sometimes even disgusting. The example Lynch used was Safety-Kleen, a company that built an attractive business from the collection and recycling of oil and other industrial waste products. The same could certainly be said though for Darling (NYSE:DAR), the only publicly-traded company with significant operations in the field of rendering, recycling and recovering the food industry's biological waste products. 

A Solid End to the Fiscal Year 

Darling took a bit of the wind out of its own sails by preannouncing results for the fourth quarter a little while ago. Nevertheless, reported revenue growth of 52% (and organic growth of 33%) is still quite impressive and was quite a bit better than the original projections for the quarter. Likewise, the company's adjusted EPS of 0.22 was not only a bit ahead of updated expectations, but well ahead of the 17-18 cent range in place a month ago.

Although Darling does not include much information with its press release, the company followed its press release with its 10-K. To that end, free cash flow again ticked up for fiscal 2010. Investors should note that free cash flow growth has been trailing revenue growth, but increased amounts of capital expenditures have clearly played a role in that equation. 

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