Allegheny Strikes 52-Week High - Analyst Blog

Shares of Allegheny Technologies ATI touched a new 52-week high of $38.05 on Mar 25, above its previous high of $37.59. The stock pulled back to close the day at $37.71.
 
The Pennsylvania-based metals processor, which has a market cap of roughly $4 billion, has seen its shares shoot up roughly 23% over a year. Average volume of shares traded over the last three months is around 1,251K.

What's Driving ATI Up?

Allegheny's consolidated profit for the fourth quarter of 2013, reported on Jan 22, jumped manifold to $173.4 million or $1.62 per share. Its adjusted loss from continuing operations for the quarter was narrower than the Zacks Consensus Estimate.
 
Allegheny, a Zacks Rank #3 (Hold) stock, is witnessing healthy demand from aerospace OEMs, driven by production ramp ups. It should benefit from its diversified global growth markets and differentiated product mix.

Allegheny envisions business conditions to gradually improve through 2014. The company anticipates market conditions to remain favorable across many of its major markets over the next 2-5 years.
 
Moreover, Allegheny expects continued increase in aerospace build rates. It expects capital spending on global oil and gas exploration and production forecasts project to remain strong.

Allegheny is in the process of finishing several self-funded capital projects which will help it to augment organic growth. The company's $1.2 billion Hot-Rolling and Processing Facility (HRPF) project remains on schedule and is expected to complete the cold and hot-commissioning process in 2014. The HRPF facility is expected to significantly boost capabilities of the company's Flat-Rolled Products division.  

Allegheny also continues to improve its cost structure with its gross cost reduction initiative. The company exceeded its target of at least $100 million in cost reductions in 2013 and achieved roughly $141 million in gross cost reduction during the year, partly through operating cost reductions and productivity improvements. Allegheny expects at least $100 million in gross cost reductions in 2014.

Other Stocks to Consider

Other metals companies worth considering include Worthington Industries, Inc. WOR, NN Inc. NNBR and The Norsk Hydro ASA (NHYDY). All of them hold a Zacks Rank #2 (Buy).