MEA

[422fwhp]

http://www.fool.com/investing/general/2008/02/06/beat-this-stock.aspx

...and from B.C.

Metalico (MEA): a play on improving scrap prices; also a possible takeover candidate (10.10 ) : Steel stocks are widely followed, but the steel scrap side of the market is not well known. Scrap is an important raw material used to make new steel, especially for mini-mills. Holding an economically sensitive stock can be a concern in this environment, however, scrap prices have erupted, according to Purchasing.com. Supply has tightened because of reduced midwinter supply and stronger-than-expected demand. We have been on a number of steel company conference calls and most expect scrap prices to continue to remain high boosted by a weak dollar which is increasing demand for scrap exports.... Metal Mgmt (MM) and Schnitzer Steel (SCHN) are big players in scrap recycling, however, a lesser known name looks pretty interesting: Metalico (MEA). The co collects industrial and obsolete scrap metal, processes it into reusable forms and sells it primarily to steel producers as a raw material. It operates 11 recycling facilities in NY, PA, OH, NJ. Metalico also has biofuel exposure as it recently acquired AgriFuel, which produces biofuels from waste vegetable oil, fats, and feedstocks. MEA is profitable and growing strongly as Q3 revenue rose 84% yr/yr to $102.2 mln... The scrap industry is very fragmented and an important part of MEA's strategy is making acquisitions. MEA  is somewhat of a roll-up operation. However, because so much consolidation is going on we think Metalico is also a potential target. There have been some large acquisitions. In Oct, Steel Dynamics (STLD) acquired Omnisource for $1.1 bln, and Sims Group announced a deal to acquire Metal Management (MM) in Sept 2007 for $1.6 bln, an 18% premium. Bottom Line: The stock has held up well in a down market which we view as a positive. Given that MEA is profitable, growing strongly, benefits from rising scrap prices, is reasonably valued (p/e 13.8x on 30% EPS growth for a PEG of 0.46x), and operates in a sector with increased consolidation, we wanted to put this lesser known, interesting name on your radar screen. Mkt cap $320 mln, float 18.9 mln, avg vol 247K.

[422fwhp]

Looking pretty good this morning.

[BigSully1]

Very nice volume on he move back up above the 50DMA

[BigSully1]

closed at $14.15, up 18%

[422fwhp]

...small article in IBD...put it on your screen I think it's going

[422fwhp]

Very quickly, The IBD gives a run-down on MEA under "NYSE Stks in the News," citing this sm-cap's various negatives, w/ the caption that reads, "Tried-and-True Recipe for Growth: Buy Rivals." They also go through various components of its chart formation, and positve sales growth, etc.  But two really interesting things about this are (a) there's no chart, as the stk is below $15 and (b) briefer just mentioned:  MEA   Metalico- Strength today being attributed to NUE for MEA rumors; also chatter co could debut in IBD100 if it finishes out the week above $15 (13.99 +0.74)

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Metalico (MEA): has lagged the steel stocks, but benefits from same trend; strong growth, takeover target; chart looks good (12.86 +0.21) : Most investors are well aware that commodity stocks have been huge winners (steel, coal, iron ore, fertilizer etc.). However, few are probably aware that scrap steel has also been rising sharply. Scrap steel (primarily junkyards etc.) is an essential raw material used to make new steel. Metalico (MEA) is a name we profiled in Oct 2007 at $10.04. It is up 26% since then, but still lags well behind the recent move in steel stocks (since mid-Jan: AKS +80%, STLD +55%, NUE +54%, X +52%).... The co operates 14 recycling facilities where it collects industrial and obsolete scrap metal, processes it into reusable forms and sells it primarily to steel producers as a raw material. MEA also has biofuel exposure as it recently acquired AgriFuel, which produces biofuels from waste vegetable oil, fats, and feedstocks. The co is profitable and growing strongly as Q1 revenue rose 230% yr/yr to $170.5 mln. Granted some of this was due to acquisitions, but it is still impressive. Also, the co hinted that Q2 was shaping up well saying that ferrous scrap metal pricing was steadily increasing thus far, reaching record levels in April.... Another part of the story is that the scrap industry is in early stages of consolidation. With scrap prices rising, steelmakers are seeking to control their cost exposure to scrap by acquiring scrap processors because it is such a large part of their input cost. For example, Nucor (NUE) recently acquired David J. Joseph Co for about $1.44 bln. This follows Steel Dynamics' (STLD) mammoth purchase of Omnisource for $9.7 bln and Metal Management (MM) was acquired last Sept for $1.6 bln, an 18% premium, by Sims Group... Bottom Line: Given that MEA is profitable, is reasonably valued (forward p/e of 12x), and operates in a sector with increased consolidation, we wanted to put this lesser known, interesting name on your radar. The stock also looks strong on a technical basis as it has had strong volume on up days and light volume on down days. It has also pulled backed a bit from its recent highs. Mkt cap $460 mln, float 23.6 mln, avg vol 349k.  B.C

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24-Apr-08 15:29 ET In Play Metalico: Acquisitions and strong pricing drive Q1 results; tgt to $17 - Morgan Joseph (13.37 -0.52) -Update : Morgan Joseph notes that MEA reported Q1 results exceeded expectations. They say the YoY improvement in EPS was a result of higher sales, due in part to acquisitions, strong commodity pricing, and favorable SG&A leverage, but partially offset by higher diluted shares outstanding. The firm also says the strong results demonstrate the co's ability to grow revs and EPS via a combination of acquisitions, further diversifying its commodity mix. Firm raises their tgt to $17 from $14.
24-Apr-08 09:13 ET In Play Metalico beats two-analyst est by $0.06, handily beats on revs (13.89 ) : Reports Q1 (Mar) earnings of $0.20 per share, excluding non-recurring items, $0.06 better than the two-analyst est of $0.14; revenues rose 229.8% year/year to $170.5 mln vs the $121.3 mln two-analyst est. "We are extremely pleased with our performance. As a result of last year's acquisitions and the recent purchase of American CatCon in January, Metalico started 2008 with a much larger operating platform. In addition, we benefited from rising commodity prices throughout the quarter coupled with unit volume growth." The Company said it believes results for the second quarter of 2008 may be influenced by several factors: Ferrous scrap metal pricing has steadily increased during the second quarter, reaching record levels in April. Continued high prices should stimulate strong unit volume activity... Platinum Group Metal ("PGM") prices rose to world record levels during the first quarter on perceived tightness of future supply arising from production constraints due to the widely publicized electrical energy shortfalls in South Africa. P.G.M. prices are off about 10% from their record levels of the first quarter, but appear to be settling there in a narrow trading range. This may have the effect of reducing unit volumes in the co's non-ferrous business but it is unclear yet what impact slightly lower metal prices could have. Competition for market share should continue to be intense during the period.   B.C

[422fwhp]

Broke thru $15

[Lucas Scott]

Mamma MEA!

[BigSully1]

Made the IBD 100 this weekend at #47.

[setravis]

updated chart look...
also see... http://www.3stocksonfire.org/trading/index.php?topic=9603.msg122311#msg122311