1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Sally Jones
Sally Jones
Articles (580) 

Alan Fournier - Steely on Steel with USAP

March 07, 2013 | About:

On March 6, 2013, Alan Fournier, fund manager of Pennant Capital Management, made his seventh add of Universal Stainless & Alloy Products (NASDAQ:USAP) stock in a string of adds this year. With this latest increase of 0.76%, Fournier owns 1,103,668 USAP shares at the average price of $36.15. USAP's stock price continues to fluctuate slightly since its drop on Jan. 28, 2013 to $32.78.

[u][/u]Alan Fournier is a value investor who pays attention to the both the micro and macro picture. Pennant Capital Management’s portfolio lists 42 stocks with a total value of $4.7 billion, and a quarter-over-quarter turnover of 10%. The Pennant Capital portfolio heavyweight sectors are currently technology 28.7%, consumer cyclical 17.7% and healthcare 13.7%.

In a competitive global industry, USAP shows sales of $250.9 billion, and a profit of $14.6 billion, with products selling to the original equipment manufacturer as well as the middle man service centers of forgers, wire drawers and rerollers. USAP’s specialty bar facilities are reputed to be among the most diverse producers in the industry for product size, range and capability. Serving industrial and military customers in the aerospace, automotive and heavy equipment industries, USAP competes with both domestic and foreign producers of specialty steel products.

Headquartered in Bridgeville, Pa., and established in 1994, Universal Stainless & Alloy Products has a market cap of $249.7 million; its shares were traded around $36.22 with a P/E ratio of 15.1 and P/S ratio of 1. Universal Stainless & Alloy Products had an annual average earnings growth of 11.9% over the past 10 years. Over the last 10 years, USAP has had positive earnings in eight of those years and positive operating cash flow in almost every single year in the past decade except for 2004. Any mood swing in the company’s gross and net margins reflects economic conditions and the competitive global steel industry that takes hits from unfair pricing practices from afar.

USAP Annual Growth

1362680977140.pngUSAP data by GuruFocus.com

GuruFocus "Real Time Picks" reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only. If you are not a Premium Member, we invite you for a 7-day Free Trial.

About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 4.7/5 (6 votes)


Kfh227 premium member - 3 years ago

I read up on this one. I had to seeing how Alan Fournier keeps accumulating. Looking at the balance sheet alone, this is fairly valued. But USAP seems to be moving into higher margin products. They have been and state that they intend to continue to do so. So, there is the catalyst.

Please leave your comment:

GuruFocus Mobile App

User Generated Screeners

georgebornsteinNets] nets
philippeSmall cap good potentiel
DBrizanbuffet beater
DBrizanWFC RY TD BNS beater
Gina ZhangDiv Yield
UVInvestorsGrowing High ROE
niregunSP performer
morsy.hananGuru undervalued
woodman1024Safe Large Stocks
yukondeltagAcquirer's Multiple - All Cap

Select portfolio(s):

  • Loading...

Why you are interested?

Your selection and notes will be stored in your portfolio.

Login to add portfolio
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)