Unlike short-cycle industrials, where the Street freaked out in March and then bid the stocks back up to about 90% of where they started the year (or even above, in the case of a few names like Rockwell (ROK)), companies with primary exposure to the aerospace industry have been knocked down and largely stayed down, with Carpenter Technology (CRS) shares down more than 50% year-to-date and basically flat since my last update on the company.
I wasn't bullish on Carpenter then, as I thought it was too soon to play the eventual recovery, and I'm hesitant to turn too bullish now. I still think short-term fair value is in the mid-to-high $20s, and I think the shares can go higher down the line, but there's not going to be much good news from the aerospace sector for a while, and this whole sector has done a pretty poor job of generating attractive long-term returns. Still, planes are going to get built again sometime, and Carpenter shares have generating strong trough-to-peak returns in the past, so if you think you can time this correctly, this is a name worth considering.
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