Wednesday, July 16, 2014

Seeking Alpha: Materion Is Getting Better And Taking The Valuation With It

On the whole, you haven't missed much if you sat out the specialty metals space since December. Carpenter Technology (NYSE:CRS), Haynes International (NASDAQ:HAYN), and OM Group (NYSE:OMG) are all pretty close to flat over the last eight months, while Universal Stainless (NASDAQ:USAP) has fallen about 15%. Allegheny Technologies (NYSE:ATI) and Materion (NYSE:MTRN) have done much better, up more than 30% over that stretch, though Materion's performance puts it closer to the pack on a trailing one-year basis.

Valuation keeps me from being unreservedly bullish on Materion, but I really like this business. The business isn't wholly (or even mostly) dependent upon beryllium, nor any particular end market, but still has enough exposure that if beryllium supplies tighten further, it can benefit the company. I like the return to 10% order growth and management's goals for ongoing margin and capital efficiency improvement. Again, valuation is a little iffy but it's not ridiculous, and the underlying quality of the business keeps me positive on its prospects.

Follow this link to the full article:
Materion Is Getting Better And Taking The Valuation With It

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