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    • Mon Sep 17th 01:13 AM | Rating: 0 0
      Commented on:
      Why I'm Not Buying Allegheny Technologies, Titanium Metals, or RTI International Metals, Just Yet
      My thouths on TIE from technical point of view.

      The reason for TIE's range bound movement is:

      www.schaeffersresearch......

      Put/Call ratio of 0.58 for September options is bearish. Sizable amount (>8K) of put contracts @ $30 strike price creates strong support, while 10.5K of call contracts @$35 strike price very strong resistance.

      If TIE closes above $32 on INCREASED volume, it will indicate a change of trend by breaking the neck of the inverted head & shoulders as well as a resistance line drawn from high on 05/11/07 and high on 7/23/07.
      View article »
    • Tue Aug 28th 16:19 PM | Rating: 0 0
      Commented on:
      Titanium Metals Is Going Down
      Richard Jahnke on Briefing.com wrote on -8-28-07:


      Titanium Metals Corp. (TIE 30.35) has been overlooked by many investors amid the wave of merger activity in the metals industry in the past year. However, the Dallas-based company has strong long-term growth prospects and continues to benefit from increasing demand for its products from commercial aerospace companies and other major industrial markets.

      Along with titanium sponge (primary titanium), Titanium Metals makes melted, mill, and fabricated titanium products, which are used primarily by commercial and military aircraft manufacturers, as well as the power generation, automotive and sporting equipment industries.

      Titanium Metals' impressive list of customers, which includes Boeing Co. (BA 98.54), Rolls-Royce and United Technologies Corp. (UTX 73.72), use titanium for applications ranging from jet engine components to pipe fittings to golf clubs. The aerospace industry, however, accounts for well more than half of the company's business.

      As highlighted in our view on the Basic Materials sector, a global spending spree has driven orders for commercial aircraft from Boeing and Airbus. Improved financial conditions of the U.S. legacy carriers and ongoing industry consolidation could extend the bull cycle as other areas start to cool.

      Meanwhile, defense spending remains at a high level given the ongoing conflicts in the Middle East, as well as homeland security efforts and the Army's modernization and refurbishment. The defense budget is approximately 3.7% of GDP, and is expected to remain at elevated levels, which should support further growth for defense contractors and subsequently Titanium Metals.

      Second Quarter Results

      Earlier in August, Titanium Metals reported a higher second quarter profit that matched analysts' expectations, as a positive shift in product mix offset declining shipments for melted and mill products due to the effects of production delays in certain commercial aircraft and other adjustments to building schedules of certain customers.

      Specifically for the period, the company posted earnings of $76.3 million, or $0.42 per share. That was up 41% from $54.3 million, $0.31 per share, a year earlier, and in line with analysts' expectations. Revenue, meanwhile, rose 13.4% year/year to $341.2 million, but fell short of the consensus estimate of $356.6 million.

      The revenue shortfall was due to a decline in both melted and mill shipments, but was mitigated by higher average selling prices due to a favorable shift in mix to a greater proportion of aerospace grade sheet and plate. The higher value product mix helped contribute to stronger margins in the period. Gross margin improved 70 basis points to 39.7%, despite higher cost of sales associated with higher raw material and production costs, while operating margin improved 60 basis points to 34.6%.

      Overall, the latest results still reflect solid industry fundamentals and continue to support a long-term favorable trend in demand for Titanium Metals' products across all major industry market sectors, which have favorably impacted melted and mill titanium prices.

      The company expects overall capacity utilization rates to remain high for the remainder of the year and it intends to continue to explore other opportunities to expand existing production and conversion capacities through internal expansion, as well as through joint ventures and acquisitions.

      Positive Outlook

      As demand for Titanium Metals' products remains strong from commercial aircraft manufacturers, defense contractors, and other industrial companies, investors have the opportunity to pick up shares of the company on the cheap, after a recent decline in prices. Since reaching a 52-week high in May, shares of Titanium Metals have fallen roughly 22% due to worries that the company would miss second quarter expectations, as well as broader economic concerns and headline risks.

      However, such worries have been greatly exaggerated. The stock is still up about 20% in the past twelve months, and approximately 5% since the beginning of the year. With recent risks already reflected in the current price, the stock remains well-positioned for further appreciation.

      The stock is trading at a forward multiple of 15.1x earnings and sports a favorable P/E to growth ratio of 0.76. Furthermore, Titanium Metals has been rumored as a takeover candidate in recent months, amid the frenzied merger activity in the sector, which could also bode well for investors. The company has a return on equity of 36.74% and has no debt, and roughly $23.4 million in free cash flow.

      What is your response, Mr. Brochstein?
      View article »
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