2012 "Best on the Street" Equity Analyst Picks His Favorites in Specialty Metals Sector: a Wall Street Transcript Interview with Daniel Whalen of Topeka Capital Markets
67 WALL STREET, New York - April 15, 2013 - The Wall Street Transcript has just published its Metals and Mining Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Precious Metals, Global Iron Ore Production, Emerging Market Infrastructure Construction, Midcap and Small-Cap Consolidation Activity
Companies include: AM Castle & Co. (CAS), Allegheny Technologies Inc. (ATI), Carpenter Technology Corp. (CRS), Dynamic Materials Corp. (BOOM), Haynes International Inc. (HAYN), RTI International Metals Inc. (RTI), Schnitzer Steel Industries Inc (SCHN), Universal Stainless & Alloy Pr (USAP), Worthington Industries, Inc. (WOR) and many others.
In the following excerpt from the Metals and Mining Report, an award winning analyst discusses the outlook for the sector for investors:
TWST: Can you begin with a brief overview of your coverage, including some of the specific names you follow?
Mr. Whalen: We cover the metals and specialty materials industry. We really focus more on the specialty metals side, which has both cyclical and secular drivers, most notably from the commercial aerospace market from a secular perspective. Some of the names we cover include A. M. Castle (CAS), Allegheny Technologies (ATI), Carpenter Technology (CRS), Dynamic Materials (BOOM), Haynes International (HAYN), RTI International Metals (RTI), Schnitzer Steel Industries (SCHN), Universal Stainless & Alloy Products (USAP) and Worthington Industries (WOR). We are still in the process of building out our coverage list, as we are still relatively new to Topeka Capital Markets.
TWST: For which metals and specialty materials do you believe there is the most robust demand right now? What is driving that demand? And which of your companies has exposure to the metals where you see strong markets?
Mr. Whalen: In terms of the metals that are better-positioned, we believe it is prudent to focus on the higher valued-added premium alloys that are more levered to the commercial aerospace market. The aerospace market is not without its own risks, but it is very well-positioned, given its seven-year-plus backlog. Beyond the impressive backlog, there are also secular drivers underway. We are going through a transition here with wide-body aircraft garnering a larger percent of the global aircraft market, so beyond the sheer size of the larger aircraft benefiting the specialty metals industry, there are also structural changes underway, as well as some of these aircraft are more composite-based. This consequently results in a higher mix of specialty metals beyond just the larger size of the aircraft.
So you have both cyclical and secular drivers that are benefiting the specialty metals side of the world. Additionally, new aircraft engines as well as those that are still being designed call for higher thrust and fuel efficiency and typically operate at higher temperatures, which is an additional secular driver for the specialty metals industry.
TWST: You believe Dynamic Materials could grow through bolt-on acquisitions in 2014. Can you comment on that specifically? And more generally, what is your outlook for M&A for the sector as a whole over the next two years?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
