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Hexcel Corp. Message Board

  • WeakWalkTheory WeakWalkTheory Aug 28, 1998 10:52 AM Flag

    Comments and perspective?

    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?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • 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.

      • 1 Reply to winmore_98
      • 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.

    • WWT:

      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.


      • 2 Replies to Angst1998
      • Hey, if you wanted to repurchase shares at bargain prices you would not go on a promotional binge either.

      • 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.

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