Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Carpenter Technology Upgrading Capacity And Margins At The Right Time

The success or failure of Carpenter Technology (NYSE:CRS) is ultimately going to have much to do with the fate of the commercial aerospace cycle, so how you feel about that market certainly plays into whether this is a worthwhile idea to consider. Apart from that, though, Carpenter has been making moves to broaden its end market mix (including a growing opportunity in energy). Carpenter is also adding high-end capacity ahead of an expected upswing in demand and this move should prove a good one for both sales and margins.

With more than 40% of sales tied to the cyclical aerospace market (and another 20% or so tied to other cyclical markets like autos/transportation and energy), cash flow-based methodologies...

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