This board generally provides substantive and civilized material, so I'm asking for some comment. I've been watching HXL since its stumble, and have been considering it for my small cap "very long term" collection. The positives: seems that HXL's the clear leader in its field; has both large civilian jetliner makers in its stable, as well as newest high-performance military programs; recent acquisition lowers over-dependence on aircraft makers; use of advanced materials continues to increase in many sectors. Negatives: could this be another "forgotten" small cap, a solid niche player that stumbles, sports a Russia-like P/E, absent any accounting or management shenanigans, but then just sits there forever, ignored and shunned? Any opinions by long-term holders/watchers of HXL?
WWT, you are right about the fundamentals. Have you ever wondered about those stocks that tanked and then recovered to new highs? Wondered where you were when you could buy it cheap? Well, we are in that area with HXL. Wall Street does not like the recent acquisition as it requires a tender to really succeed, and it looks like it is going poorly. (How many times can they extend the date?) However, once we get past this growth pain the earnings will attract buyers just like it did in the not so distant past. And for technicians, checking their charts, HXL is the kind of stock that makes their day. Long term? Owning the carbon fiber market means more than we can comprehend right now. I'll buy more.
Winmore, I agree with your perspectives. And although I decided in favor of discretion over valor and sold my HXL a few points ago, I think the company has a bright future. Somewhere out there. I just want to say, in the interest of accuracy, that HXL does not "own the carbon fiber market," any more than ZOLT does. If any company deserves that appellation, it is surely Toray. Toray is the largest CF producer in the world, and the most sophisticated. It's no accident that it makes primary structural parts for Boeing, not secondaries and interiors like Hexcel. That said, I believe Hexcel has a broader position in composite structures, and I may re-establish a position in the stock after the dust settles. I think that, in addition to everything else, the market hates the Clark-Schwebel acquisition. Maybe because it's huge, maybe because of the debt involved, maybe because C-S's market is depressed, and maybe because it's a time to be really, really careful with your capital expenditures. Just MHO.
Right now, all small caps look like "very long-term" collectibles.
Seriously, the positives of this company are evident -- you cited them. However, HXL's ability to get noticed is a lingering concern of mine. It's not being ignored or shunned -- as with many secondary stocks, it's just not getting noticed. That failure rests largely with the company. They appear mute.
HXL began dropping when mgmt commendably predicted flattened earning in light of declining jet production and general downturn in aerospace cycle. Since then, the decline in share value has accelerated as overall mkt conditions deteriorated. There is not, and never has been, in recent time anything wrong with this company. Sooner or later, its share price and earnings reports will start popping up on value screens run by institutions and there will be buyers. Maybe I'm kidding myself (I went long at 17) but I think there is funamental value in this company. I have to think mgmnt will stress share buy-backs with the price at these levels.