Sunday, February 14, 2016

Seeking Alpha: Carpenter Technology Hammered On Slow Aero And Vanishing Energy

Carpenter Technology (NYSE:CRS) may operate in a specialized niche of the metals and alloys sector, but that hasn't shielded it from serious pressures across its business. With distributors like Wesco Aircraft (NYSE:WAIR) and KLX (NASDAQ:KLXI) trying to operate with leaner inventories and the energy equipment market in freefall, Carpenter has seen ongoing operating erosion for over a year now, and the shares are down close to 40% over the last year.

Energy will bottom out at some point, and the combination of increasing aircraft builds and an eventual completion of those distribution inventory adjustments will improve sales to the aero end market. What's more, the company has shown that it can generate good margins and strong operating leverage when volumes are strong. The question is how much risk an investor wants to take on by holding the shares ahead of that recovery, particularly when this is really more of a trade than a long-term holding.

Read more here:
Carpenter Technology Hammered On Slow Aero And Vanishing Energy

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