Thursday, November 6, 2008

Stock Analysis on a small cap: Horsehead Holdings Corp.(ZINC)

Horsehead Holding Corp. (ZINC) is the largest zinc producer in the United States and the leading manufacturer of value-added zinc products including zinc oxide and zinc powder. They have been a technological leader and innovator in the zinc industry for more than a 150 years. They are also the world's largest recyclers of zinc-bearing materials. Zinc is used in brake linings for auto's, batteries, the white pigment in paints, the rubber industry, and as an opaque sunscreen.

Horsehead(ZINC) is currently trading at $3.00 per share with a NCAV(net current asset value) of $4.35 per share. The property and equipment is valued at $3.15 per share. ZINC has almost nil in long term debt plus $2.00 in cash per share, with a book value of $7.65 per share. The trailing 12 month REO(return on equity) is 33%. The stock is trading lower simply on the slowing economy, like everything else. Earnings for the trailing twelve months were 1.88 per share and they are expected to be flat next year. The stock traded as high as $23.51 within the last year. This is a cyclical company and it is trading at 69% of its NCAV. At current prices this looks cheap!

Further research is recommended.
Author does not currently hold any position.

1 comment:

  1. Valuegeek from has also done a fine analysis on zinc. But this one isn't for me. Numbers look good, but I dont like the industry of this company. If was to go into a commodity, I'm looking at SCHN at the moment.