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

Carpenter Technology Ready For Demand And Free Cash Flow Growth

Carpenter Technology (NYSE:CRS) has done alright since my December 13 write-up, climbing more than 22% but trailing Precision Castparts (BATS:PCP) and Allegheny Technologies (NYSE:ATI) (while outperforming specialty alloy companies Universal Stainless (NASDAQ:USAP) and Haynes International (NASDAQ:HAYN)). There have been some challenges for the company as its major aerospace end market worked down inventories of engine parts and fasteners, but lead times are expanding, nickel prices are rising, and Carpenter is nearly finished with the addition (and customer qualification) of a new premium/super-premium facility in Athens, Alabama.

On the negative side, Carpenter already trades close to its historical average EBITDA multiple (around 8.5x). On a more positive note, the order...

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