There's really not much good news in the world of specialty alloys, particularly as recoveries in end-markets like aerospace, power gen, and oil/gas look like multiyear events. For companies like Universal Stainless & Alloy Products (USAP), Allegheny (ATI), and Carpenter (CRS), the recovery is not going to sharp or quick.
USAP shares are basically flat from when I last wrote about the stock, outperforming Carpenter, but lagging Allegheny and Acerinox (OTCPK:ANIOY). Management is doing what it can to contain costs and get the company through this chokepoint, but the near-term outlook is decidedly challenging. Major markets like commercial aerospace, power gen, and oil & gas won't be much help until 2022, at best, and comparatively stronger markets like auto tooling, semiconductor, and medical aren't big enough to carry the extra load. While I see some value here, this is a high-risk situation, and it's tough to see what will drive a quick cyclical turn.
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Universal Stainless & Alloy Products Looks Undervalued, But This Downturn Is Brutal
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