TIE - Titanium Metals

[Grizzums]

Ive been accumulating this one and in the process been avg'ing down some. I'm still red by about 4% but options activity here were definitely of interest today....

Ya might want to keep an eye on it.

[BadThad]

Why is their PPS down so much over the past months?

[Grizzums]

Originally Posted by BadThad

Why is their PPS down so much over the past months?

Well, for one, the aerospace industry accounts for a significant portion of worldwide Titanium demand. Commercial aerospace is not only a Cicular industry but has been hit hard during the rise in oil and hence has changed the near term outlook for Titanium demand of which has been reflected in TIE's stock price. The aerospace industry has significant influence on Titanium companies, particularly mill product companies, like TIE.

"Deliveries of titanium generally precede aircraft deliveries by about one
year, and our business cycle generally correlates to this timeline, although the actual timeline can vary considerably depending on the titanium product."

Some orders for new planes have been both rescheduled, delayed and/or canceled. There is also simply the prospect for more of this (order delays/cancellations) that reflects in sp when forward looking into the industry. It was somewhat expected that the airline cycle may last well into 2010 -11 and I imagine the stratospheric rise in raw material costs (mainly oil related) stumped that cycle early.

TIE had been preparing for increasing commercial production and expected capacity to remain high, anticipating continued strong demand from the aerospace sector. As a result, I think the timing of skyrocketing oil - painfully hurting airlines in the process - was unforeseen by TIE management and has in turn been painful for TIE as well.

TIE has long been rumored as a potential take out candidate by bigger metal companies looking to diversify, who knows there....

I started buying it as the price finally started to look cheap. Keep in mind that 3Q's have been historically weak for TIE.

Good Luck.

[BadThad]

Ahhhh...that makes sense. One thing to keep in mind, and it might make me invest, those delayed and "cancelled" orders will eventually need to go through. I've been in industry long enough to know the bean counters can't keep major purchases from happening forever. If a capital item is needed, it is NEEDED, and they will have no chioce but to get moving at some point.