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5-18-2006 MEA -Metalico Inc.
CURRENT PRICE: $4.80
TYPE OF PLAY: EARNINGS GROWTH /TECHNICAL ANALYSIS
Metalico Inc. is a diversified company focused on two segments of the metal industry- Recycling of Metals and Lead Fabrication. Their recycling side operates both ferrous and non-ferrous scrap metal recycling facilities in the Great Lakes region, serving both U.S. and Canadian markets. All forms of metal scrap are purchased from manufacturers, small scrap dealers, demolition contractors, and peddlers. The scrap is sorted and prepared for sale to mills, furnaces and foundries. The Lead Fabrication division has six locations located in six states, and uses primarily materials from their own recycling business. In the most recent Metalico earnings report announced record 2006 first quarter sales, up 24%, operating income, up 52%, net income up 76%, and a 57% increase in earnings per share, each as compared to the first quarter of 2005. Furthermore, the CEO made some rather bullish comments in regard to the current quarter: "These are the best quarterly results in the Company's history," said Carlos E. Aguero, Metalico's Chief Executive Officer, "and we are particularly pleased that the gains resulted from increasing unit volume sales in tandem with strong commodity selling prices and continued strength in the lead fabricating segment. Furthermore, we have continued to experience similar commodity pricing strength so far this quarter." Due to the recent market conditions, the stock has retraced almost 100% of the 1 day surge that occurred on earnings day (5/02/06) and has become mildly oversold. This is a sign to us that day traders from that period have exited and now it is back at pre-earnings bargain levels.
LINKS FOR FURTHER READING:
MEA Homepage
Most recent MEA earnings filing
SEC filings for MEA
General MEA statistics
