The recent rendering of the markets has got traders worried. But some investors (no, not short sellers) hope that rendering actually leads to profits. Darling International Inc. (NYSE: DAR), the largest publicly traded food by-products recycling company in the United States, releases its fourth-quarter and year-end results on Wednesday. The ensuing market action is bound to affect holders of the Market Vectors Agribusiness ETF (NYSE Arca: MOO).

The r-squared (r²) correlation between the price of the exchange-traded fund and Darling International's stock value is 92%, one of the tightest of the 41 companies in the MOO portfolio. Remarkably, Darling International makes up only .28% of the fund's weight.

Darling International Inc. (DAR) Performance

Darling International primarily recycles used restaurant cooking oil and renders by-products from meat processors into tallow, feed-grade fats, meat and bone meal, and hides.

Such an unpleasant business model has its rewards. It's a high-margin business with little competition. The margin numbers, too, have been improving over the past couple of years. As has the cash flow from operations.

There have been a couple of wobbles in the company's ratios, however. For one thing, its debt-to-capital ratio rose in the last fiscal year, mostly due to a decline in equity value. Company debt, in fact, was retired over the past year. The asset-to-equity ratio, at the same time, has come in a bit, reflecting the recessionary repricing of plant and equipment.

The green-eyeshade set has its eye on an 11-cent EPS for the fourth quarter versus 18 cents a year ago. Earnings surprises aren't unusual for Darling, though. In fact, there have been four consecutive surprises over the past year, most of them positive.

The positive surprises haven't increased investors' taste for Darling's stock. With 21% downward momentum in earnings estimates over the past 90 days, analysts, too, seem to be a bit dyspeptic.