Only Titanium Minerals has been a losing recent investment for him. He started buying in late 2010 when shares were trading above $17. He bought hundreds of thousands more shares at that price last spring, when shares were stuck in the $17 range. By the time shares fell below $17 last June, he was still buying. And he's been buying ever since, even though shares are now around $14.50.
Why is Simmons so keen to own millions of shares of Titanium Metals? Because he knows the commodity plays a key role in the generation of fuel-efficient airplanes. And though global titanium production is fairly constant, demand is set to rise. "Aircraft build rates provide visibility on a likely titanium market tightening in
They add that because the company mills raw titanium and then modifies it into key shapes for customers, it can maintain low costs and high profit spreads. That's why "TIE has significant leverage to anticipated demand growth and the highest projected EBITDA margins of the group," (that also includes RTI International Metals (RTI), Carpenter Technology (CRS) and Allegheny Technologies (ATI).
Citigroup's analysts have a current $17 price target but note further upside if the global economy and titanium demand get stronger. This stock, currently trading around $14.50, hit $35 back in 2007 when industry conditions were aligned. Harold Simmons is well aware of that as he continues to but this stock at ever-lower levels.