This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Specialty Metal Stocks Overcome Volatility

NEW YORK (TheStreet) -- With uncertainty looming around the commodity space owing to developments in China and Europe, we have researched a few specialty metal companies that do not depend upon the movement in metal prices but the end-market that they cater to.

Specialty metal companies are companies involved in the production of nickel, nickel base alloys, cobalt base alloys, titanium and titanium base alloys, and other metals such as zirconium, hafnium and niobium.

We reviewed the performance of these companies vis-à-vis the performance of base metal producers, and found out that a few stocks have been major outperformers and relatively less volatile even during global uncertainty.

Our researched stocks include, Allegheny Technologies (ATI), RTI International Metals (RTI), Titanium Metals (TIE), Ladish Co. (LDSH), Haynes International (HAYN), Carpenter Technology (CRS), Globe Specialty Metals (GSM), and Sims Metal Management (SMS).

Stocks such as Titanium Metals, Ladish Co. and Carpenter Technology have gained 53%, 59% and 40%, respectively since the start of the year. Moreover, these stocks have not made any rapid swings unlike a few base metal stocks.

Base metal stocks such as Freeport-McMoRan Copper & Gold (FCX), Alcoa (AA), and Southern Copper (SCCO) among others move in line with their respective metals prices, while demand-supply plays a crucial role in price determination. Any change in price of the metal on a particular day, up or down, has a major impact on the stock.

Shifting focus to specialty metal companies, demand from aerospace, defense and industrial markets plays a crucial role in revenue generation for Allegheny Technologies, RTI International Metals, Ladish Co. and Haynes International. In fact, demand from aerospace and defense accounts for 25-30% of total revenues.

Outlook

There is currently a lot of near-term uncertainty in terms of demand from the aerospace market. According to RTI, inventory levels at both Boeing and Airbus have been increasing due to lower than anticipated production over the past two years. However, the long-term demand indicators in the titanium industry seem bright as there is a significant amount of backlog in the commercial aerospace market.

Moreover, recently, Boeing announced increases in build rate (the number of aircraft that it will build) of its 777, 747 and 737. The company has seen an improvement in demand helped by a dramatic pickup in air-freight shipments coupled with improving passenger traffic. Looking at the macro picture, U.S. output of defense and space equipment moved up for the fourth consecutive month in April rising 0.5% month on month and 8% above its year-earlier level.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,919.59 +80.85 0.48%
S&P 500 1,981.60 +9.86 0.50%
NASDAQ 4,527.5140 +19.2020 0.43%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs