Haynes International (HAYN) Has Potential to Move Earnings Power in Two Years to $6 a Share: An Expert Analyst Discusses His Picks in the Metals and Mining Sector with The Wall Street Transcript

Wall Street Transcript

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 and Equity Analysts. 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: United States Steel Corp. (X), Nucor Corporation (NUE), Allegheny Technologies Inc. (ATI), Cliffs Natural Resources Inc. (CLF), Walter Energy, Inc. (WLT), GrafTech International Ltd. (GTI), Steel Dynamics Inc. (STLD), Commercial Metals Co. (CMC), Reliance Steel & Aluminum Co. (RS), Worthington Industries, Inc. (WOR), Olympic Steel Inc. (ZEUS), Thomson S.A. (TMS), Haynes International Inc. (HAYN), Kaiser Aluminum Corporation (KALU) and many more.

In the following excerpt from the Metals and Mining Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Were there any other names you wanted to mention?

Mr. Gibbs: The other names that we prefer in the specialty metals arena would include Allegheny Technologies, where we see 35% upside from current levels. I feel like most investors with this company focus heavily on the stainless steel exposure, which is a highly competitive market. However, we see them addressing those concerns and putting them to rest over the next 12 to 18 months as their new world class hot mill is commissioned.

And this is a company that's very backward-integrated in a growing global titanium market and should benefit in 2013 and 2014 from a recovery in the aerospace aftermarket and the global oil and gas and medical markets. Allegheny is a company where we see earnings in the bottoming mode, something we like from a contrarian perspective. Valuation is on the lower end of normal.

Another long idea is Haynes International (HAYN). Haynes should have potential to move earnings power in about two years to about $6 a share. We see normalized earnings for this company right now around $4 and the added $2 in earnings power driven off of organic investments in plate, sheet and tubular products. And it's a company that probably could be a handsome target for any further industry consolidation, given its size and unlevered balance sheet and over 40% sales exposure to commercial aerospace.

And Kaiser (KALU) would be the last one. This company has about 60% commercial aerospace sales exposure and 10% automotive sales exposure, with the remainder being general industrial. With $20 per share in cash on the balance sheet, Kaiser has the ability to continue to make high-return, low-risk organic investments, target acquisitions, and continue share buybacks and dividend increases over time. We also think investors can buy Kaiser right now at 6.5 times enterprise...

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.

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