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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerAllegheny Technologies (NYSE: ATI) produces
specialty metals. Products include titanium and titanium alloys, nickel-based alloys and superalloys, stainless and specialty steels, tungsten materials, zirconium, hafnium and niobium. The steels, the nickel alloys and the titanium alloys are offered as plate, sheet, engineered strip, precision rolled strip, and grain-oriented electrical products. The company also offers forgings and castings. Its biggest customers are in the aerospace, chemical process, and oil and gas industries.
Investors were pleased earlier in the week, when Allegheny issued upside EPS guidance for Q2. Management said it expected $1.65-$1.67, up from its earlier view that earnings would be somewhat higher than the $1.40 per share of Q1. The Street had been looking for $1.53. The CEO noted that the firm's risk management programs were reducing the impact of volatile input costs.
The stock
popped into a bullish "flag" consolidation pattern on the news. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the shares with three "strong buys", one "buy" and six "holds". Analysts see a 20% average annual growth rate, through the next five years. The ATI P/E ratio (8.20), PEG ratio (0.41), Price to Sales ratio (1.03), Price to Book ratio (2.44), Price to Cash Flow ratio (7.00), Operating Margin (19.63%), Return on Assets (17.59%), Return on Investment (22.11%) and Return on Equity (34.75%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 80% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $48.74 and $116.25. A stop-loss of $46.25 looks good here. Note that the firm is expected to report Q2 results on July 23rd, before the open.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
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