I've been bullish on Metalico Inc. (NYSEMKT:MEA) for some time, and my enthusiasm isn't waning, even as the market gets hit left and right.
The Western New York based, full-service metal recycler has six facilities in New York and another in Pennsylvania. A buyer of metal scrap, it then processes it into reusable forms, and then sells the recycled metals to mills and furnaces throughout the country, Canada and to exporters for sale abroad. I must note that I own this stock.
It is also the largest lead fabricator in the U.S., operating a lead metal product manufacturing, fabrication and recycling segment with facilities in Alabama, Nevada and Illinois.
Despite solid second quarter reports on the 6th of this month, Metalico has dropped over 25% in the last month, as the overall market has gotten slammed. I think it is a bargain at this price and would pick it up.
This company has a great and seasoned management team, which will help it weather the recent downturn in the stock market. It also has a strong business model, enabling it to survive the market bumpiness. I also like its emphasis on recycling and being an overall green company.
Type of Stock: In the cyclical metal products sector, Metalico has not tarnished. A converter of scrap into usable forms, and a leader in U.S. lead fabrication industry, it is pushing into new territories hungry for its product.
Price Target: Trading at $6.45, MEA has been hit along with the general market over this last month. But as it pushes into new markets abroad, and as the demand for recycling grows, I remain convicted that we could see this in the $12 range within the year.
Disclosure: I own shares in MEA.
MEA 1-yr chart: