Even before Neil Armstrong, the foot-pads of the Apollo 11 lunar landing module made the first footprints on the moon. Those pads were made of a crushable honeycomb foil manufactured by a Stamford, Connecticut innovator in the development of special purpose materials.
Hexcel Corporation (NYSE:HXL) is a leading advanced structural materials company. It develops, manufactures and markets lightweight, high-performance materials, including carbon fibers, reinforcements, pre-impregnated materials,laminates, adhesives and composite structures. The firm's materials are found in such diverse products as aircraft components, bullet-resistant vests, auto parts, golf clubs, window blinds and printed circuit boards. Customers include General Electric (NYSE: GE), Raytheon (NYSE: RTN) and Boeing (NYSE: BA). BP plc (NYSE: BP) is a major competitor.
The company surprised the Street earlier in the week, when it reported Q1 EPS of 17 cents and revenues of $328.7 million. Analysts had been expecting 15 cents and $308.5 million. Management also guided FY2007 revenues to the range $1.25-1.30 billion ($1.28B consensus). The CEO particularly cited a rebound in Space & Defense revenues for the solid first quarter figures.
The issue popped above 30-day moving average support on the news and then passed into a bullish "pennant" consolidation pattern. Stocks frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Brokers recommend the shares with one "strong buy", three "buys" and five "holds". Analysts see a 27% growth rate, through the next year. The HXL Price to Sales ratio (1.69) and Return on Equity (25.02%) compare favorably with industry, sector and S&P 500 averages.
Institutions hold about 95% of the outstanding shares. Over the past 52 weeks, the stock has traded between $13.28 and $24.91. A stop-loss of $18.70 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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Reader Comments (Page 1 of 1)
4-27-2007 @ 5:21PM
Tiger Jim said...
It is great to see an innovative Apollo era contractor doing so well. Space exploration technology has more growth potential that any sector of the national and global economy. Space is the only place with unlimited potential.