Savvy Trades and Investments

[abh3vt]

USAP (Universal Stainless Steel) in with a strong Q2 with 0.90/sh (GAAP), beating estimates by 0.38. Stock trades at 35 up about 6% in premarket. Another competitor, CRS, reported an equally strong quarter and had a very bullish CC a few days ago. Looking to expand its capacity in its premium alloy segment, with additional capacity coming online in stages....likely by mid 2025. Only fly in the ointment is the backlog, which is down sequentially and y/y, but it appears to be high relative to their current quarterly sales. I'm hopeful this will be addressed on the call at 10AM today.

CRS trades at 23x its FY25 estimate. USAP trades at 14x a 12 mo forward blended eps estimate of 2.53. USAP might be able to show seq increasing sales and eps for the rest of this year (from their last CC). I'd guess that the FY24 and FY25 numbers will be increased, and I think the stock is still undervalued given the incredible strength in demand in aerospace for premium alloy steel.