ATI
Allegheny Technologies Incorporated
Industrial/Transportation
10/01/2013
Presented
| Date | 09/26/2013 |
| Price | $30.82 |
| Market Cap | $3.33B |
| Ent Value | $4.82B |
| P/E Ratio | N/A |
| Book Value | $23.90 |
| Div Yield | 2.1% |
| Shares O/S | 107.96M |
| Ave Daily Vol | 1,430,000 |
| Short Int | 8.70% |
Current
| Price | $62.55 |
| Market Cap | $7.79B |
| Allegheny Technologies Incorporated engages in the production and sale of specialty metals worldwide. It operates in three segments: High Performance Metals, Flat-Rolled Products, and Engineered Products. The High Performance Metals segment provides various high performance alloys, including nickel- and cobalt-based alloys and super alloys; titanium and titanium-based alloys; zirconium and related alloys, such as hafnium and niobium; other specialty alloys primarily in long product forms of ingots, billets, bars, shapes and rectangles, rods, wires, and seamless tubes; and precision forgings and castings, and machined parts. The Flat-Rolled Products segment provides stainless steel, nickel-based alloys, super alloys, titanium and titanium-based alloys, and specialty alloys in various product forms comprising plates, sheets, engineered strips, and precision rolled strip products, as well as grain-oriented electrical steel sheets. The Engineered Products segment offers tungsten powders, tungsten heavy alloys, tungsten carbide materials, and tungsten carbide cutting tools. This segment also produces carbon alloy steel impression die forgings, and grey and ductile iron castings, as well as provides precision metal processing services, such as grinding, polishing, blasting, cutting, flattening, and ultrasonic testing. The company serves various markets, including aerospace and defense, oil and gas, chemical process, electrical energy, medical, automotive, construction and mining, food equipment and appliances, transportation, electronics, communication equipment, computers, and machine and cutting tools markets; and other markets requiring tools with hardness. Allegheny Technologies Incorporated sells its products through direct sales and independent representatives. The company was founded in 1960 and is based in Pittsburgh, Pennsylvania. |
Highlights
The presenter is bearish on shares of Allegheny Technology (ATI) and explained how the company – which is essentially an amalgamation of assets that have been bolted together over time - pitches itself as high value added aerospace supplier. At its core it is a commodity stainless steel business, and if investors go back and look at the company’s pre-crisis performance, it operated some product lines that generated incredible margins (non-aerospace business earned $5.00 of EPS during its prior peak), and there seems to be a perception on the Street that there will be a reversion to the mean in ATI’s stainless business. The presenter disagrees, and while the stock’s recent strength has surprised him, he sees the potential for the company to earn materially less than the market is expecting over the next 12-18 months and the stock to come under pressure.
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