After the close on Wednesday, Phibro Animal Health (PAHC) reported fiscal second-quarter EPS. Excluding currency losses, EPS were $0.33, vs. $0.34 in the prior year. Results were $0.05 above expectations.

Sales increased 2%, driven by a solid 6% gain in its core animal health business. Mineral Nutrition sales were down 1%, and the small performance products division saw sales decline 19%. However, management expressed confidence that these segments should improve in the second half of the fiscal year, as customers’ inventories have declined.

Management also maintained guidance for EPS of $1.04 to $1.16 in the current fiscal year. Given the improving top-line trends and lower commodity costs, I think PAHC should achieve at least the midpoint of that range.

The stock had a wild day yesterday, starting strong before falling to $10 a share. The early plunge may have been due to concerns over the large currency losses that the company has had in Argentina. However, the stock did recover to close the day up 7.4%, as the Argentine peso should stabilize after its recent devaluation.

At just over 10X EPS, with a 4.5% dividend yield and operations that seem to be showing improvement, Phibro Animal Health looks like it should be able to sustain a rally. Buy PAHC under $14. My target is $17.