Titanium Metals' Solid Growth Expected To Continue

Feb.15.07 | About: Precision Castparts (PCP)

Titanium Metals Corporation (TIE) is a producer of titanium sponge, melted products and a variety of mill products for aerospace, industrial and other applications. For the commercial aerospace industry, the Company supplies titanium products to manufacturers of commercial airframes. Outside of aerospace markets, the Company manufactures a range of products for customers in the chemical process, oil and gas, consumer, sporting goods, automotive, power generation and armor/armament industries. Approximately 15% of the Company's sales revenue, during the year ended December 31, 2005, was generated by sales into industrial and emerging markets. TIMET markets and sells its products in the United States, the United Kingdom, France and Italy.

FUNDAMENTALS: TIE has consistently been one of the highest rated stocks that I've tracked over the past couple years and it remains so with a slow down nowhere in site... This is a company that became profitable for the first time in '04 and is coming off a year in '06 in which profits nearly tripled. Rising profit margins and ROE indicate this is a company that continues to run on all cylinders. TIE receives a near perfect fundamental score of 30/30.

TECHNICAL: After running up more than 40 fold in three years, TIE needed to carve out a big base in order to shake out the weakest holders of the stock and begin a new run. The time for a new run is now. After reporting outstanding earnings yesterday, the stock broke out this morning and looks poised to tackle the all time high around 45. Given the steep base, I'd be looking to take my profit up around those levels.

Full Disclosure: Author is long TIE.

TIE 1-yr chart