Harsco is a diversified industrial services and engineering products company that caters to the steel/metals industry. The company offers metal reclamation, slag processing, scrap management and related services for steel/metal manufacturers. HSC's access services business rents/sells concrete-forming equipment, scaffolding, and bridge-decking products, primarily for industrial maintenance and commercial construction clients.
Typically, companies like Harsco would be more-sensitive to the business cycle, but that risk is lessened by HSC's revenue stream diversity, wide 5-continent geographic footprint, and a contemporary trend: recycling. Fortunately for Harso, recycling and reclaiming processes are likely to increase in popularity, for both cost and environmental reasons, in the years ahead. Harsco is well-positioned in this regard, and analysts generally project 13%-20% annual revenue growth for HSC for the immediate years ahead. The Reuters F2007/F2008 EPS consensus estimates for HSC are $2.97/$3.35.
[Note: Technical analysis agnostics stop reading here; all others continue.]
Technically, Harsco's chart looks strong. The stock is above its 50-day moving average and has been above its 200-day moving average for about 10 months. Further, the chart displays a healthy advance, followed by minor correction, pattern. Don't be too concerned about $60 resistance: the tough battle for HSC was $50. HSC's p/e of 20 is not low, but it's acceptable given the company's growth prospects.
Stock Analysis: Harsco is a moderate-risk stock, not suitable for low-risk investors. Investors with an investment horizon longer than 1 year should be rewarded from HSC's shares. Sell / Stop Loss: $38.
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