Wednesday, June 17, 2015

Seeking Alpha: Sluggish Markets Dragging Out Harsco's Recovery

I don't want to be flippant about it, but it seems hard to remember a time when Harsco (NYSE:HSC) wasn't a recovery/turnaround story. The company has been working for years to improve its Metals and Minerals business, and management has taken several logical steps to exit or improve underperforming contracts, but it is hard to make progress fixing a steel mill services business when the steel mills themselves are struggling.

I'm not completely certain that Harsco can get back to a point where it earns a return on capital in excess of its cost of equity capital, but it's going to take several years to find out. You could argue that Harsco is undervalued, particularly on an EV/EBITDA basis, but I believe it is going to take a meaningful recovery in steel mill utilization to drive that recovery and I don't see that as especially likely in the near term.

Follow this link for the full article:
Sluggish Markets Dragging Out Harsco's Recovery

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