Alloy Steel Inc. (fka AYSI)

[DaveinHackensack]

Remember seasonality: AYSI's fiscal Q1 is typically weaker,

because pretty much no business gets done the last two weeks of the calendar year.

It seems to me that at least some of the reason behind the blowout quarter in Q4 was because it was "catch up" earnings from the prior quarter's low number. They must have had some orders that got booked just on the threshold of Q4.

That's one possibility. A more bullish explanation would be that the production issues with the second mill were fixed, which enabled the company to increase production to meet demand. Remember, the company has said that demand hasn't been the limiting factor, production capacity has been.

People are waiting to see if this quarter was a fluke or the real deal. If a second stright quarter comes out with 10-11 cent earnings, then we will be on pace for 40 cent plus annual - and that you have to think would move the stock well about 3 and more towrads 4 or even 5.

Taking into account seasonality, I don't think we need a 10 cent+ Q1 to reinforce the potential of a ~40 cent+ fiscal year -- earnings in the high single digits might do that too. But generally, I think you're right that another quarter or two in the ballpark of the last one would lift the share price. Bear in mind though that the production capability we're talking about here is just from the company's first two mills, and the production capacity the company is planning to build in Indonesia is several times larger.