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June 7, 2010 52-Week Low Wrap-Up: Alliant Techsystems Inc., AK Steel, Allied Defense Group, Banco Bilbao Vizcaya Argentaria, Banco Santander, Brink’s Company

Patrick Goldin

Patrick Goldin

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Today, 214 companies set a new 52-week low. Of these companies, these are the companies that may be good opportunities based on my initial research. ArcelorMittal (MT)

ArcelorMittal is the world's largest steel producer, with an established presence in all major steel markets and steelmaking operations in 20 countries. The company produces long and flat steel products, using a combination of integrated and mini-mill plants, and has significant mining operations in iron ore and coal.

Alliant Techsystems Inc. (ATK)

Alliant Techsystems Inc. (ATK) is a supplier of aerospace and defense products to the United States government, allied nations, and prime contractors. It is also a supplier of ammunition and related accessories to law enforcement agencies and commercial customers. As of March 31, 2009, the Company had three segments: ATK Armament Systems, ATK Mission Systems and ATK Space Systems. ATK Armament Systems develops and produces military ammunition and gun systems, commercial products, tactical accessories and equipment, and propellant and energetics.

AK Steel (AKS)

Ohio-based AK Steel is a leading producer of flat-rolled carbon, stainless, and electrical steel and tubular products. Its products are sold primarily to the automotive industry (40% of sales), the appliance, industrial machinery, and construction industries (30%), and independent service centers (30%).

Allied Defense Group (ADG)

The Allied Defense Group is an international defense and security company that manufactures military equipment and provides related services. The company is split into four operating units. Ordnance and Manufacturing, headed by Mecar, produces ammunition and other weapons; Electronic Security designs security systems for governments and business; Environmental Safety and Security provides data for weather systems; and the Software, Training, and Simulation segment designs simulations for government training exercises.

Banco Bilbao Vizcaya Argentaria (BBVA)

Banco Bilbao Vizcaya Argentaria is the second-largest bank in Spain, among the largest in Europe, and a rapidly growing bank in the Americas. It earns about 40% of its profit in Spain and Portugal, 35% in Mexico and the U.S., 15% through its global business investment and asset-management unit, and 10% in Latin America. BBVA has grown rapidly lately, primarily through acquisitions. Most recently, it acquired four banks in the U.S., including Compass in 2007. The shares have been beaten down due to the fiscal problems of both Spain and Portugal, but at the right price, this could be a very good opportunity.

Banco Santander (STD)

With nearly $1.5 trillion assets and close to 14,000 branches, Banco Santander is one of the world's largest financial institutions. Its main focus is retail banking (about 75% of operations). It also has a wholesale bank (nearly 25%) and an insurance and asset-management venture. Around half of its business is conducted in Europe, with a heavy emphasis on Spain. The U.K. and Latin America segments account for roughly 30% and 20% of total operations, respectively. This idea is similar to Banco Bilbao Vizcaya Argentaria, in that while the situation in Spain looks dire, these companies represent good banking franchises that are worth owning at the right price

Brink’s Company (BCO)

The Brink’s Company is a provider of secure transportation, cash logistics and other security-related services to banks and financial institutions, retailers, government agencies, mints, jewelers and other commercial operations worldwide. The Company’s international network serves customers in more than 50 countries and employs approximately 59,400 people. Its operations include approximately 875 facilities and 10,500 vehicles. 71% of its revenues are from outside North America.

Bank of New York Mellon (BK)

Bank of New York Mellon was created by the July 2007 merger between Mellon Financial and Bank of New York. The resulting entity is one of the world's largest financial services companies. Through its custody operations, BNY Mellon is a leader in providing back-office services to other financial firms. The bank's asset-management and private banking operations serve institutional and high-net-worth individuals globally.

Calamos Asset Management (CLMS)

Calamos provides investment management advice and services to institutional and individual investors. The firm offers more than a dozen mutual funds and five closed-end funds, as well as separately managed accounts. Two of the firm's funds--Calamos Growth and Calamos Growth and Income--account for more than 40% of AUM

Cal Dive International (DVR)

Cal Dive International, a marine contractor company, provides underwater services to offshore natural gas and oil firms. These services include manned diving, pipe lay and pipe burial services. It also constructs, inspects, maintains, repairs and decommissions offshore pipeline infrastructure in the Gulf of Mexico, Middle East, Southeast Asia, and Australia.

Cowen Group (COWN)

Cowen Group, Inc. is an investment bank that provides research, sales and trading, and investment banking services. In November 2009, Ramius LLC and Cowen Group, Inc. completed a business combination, pursuant to which the new company retained the Cowen Group, Inc. name. Cowen Group, Inc. comprises two business units, Ramius, and Cowen and Company. The Ramius business unit will operate the combined company's alternative investment management business, and the Cowen and Company business unit will continue to run the Company's investment banking franchise, as well as its research and brokerage capabilities.

Deutsche Bank (DB)

Deutsche Bank is a global investment bank with lending operations in Germany. Some 65% of its revenue historically was generated by corporate and investment banking, 30% by private banking and asset management, and 5% by corporate investments; unusual conditions during 2009-10 make comparisons difficult. Although global, Deutsche Bank maintains deep roots in Germany, where 50% of its employees are based and where it earns 25% of its revenue.

Duff & Phelps (DUF)

Duff & Phelps is a provider of independent financial advisory and investment banking services. The Company provides independent advice on issues involving highly technical and complex assessments in the areas of valuation, transactions, financial restructuring, disputes and taxation. Its clients include publicly-traded and privately-held companies, government entities, and investment firms, such as private equity firms and hedge funds. The Company provides its services through three segments: Financial Advisory, Corporate Finance Consulting and Investment Banking.

ENGlobal Corporation (ENG)

ENGlobal provides industrial products and consulting services, primarily for oil and gas firms. The company also serves various municipalities and communications firms. The company manufactures power products, such as battery chargers, instrumentation and control systems, and monitoring systems. Services provided by the company include field services, network modeling, and air emissions consulting.

Euronet Worldwide (EEFT)

Euronet is an electronic payment provider, offering EFT processing, prepaid phone and debit card sales, and money transfer services. The company operates more than 10,000 ATMs and a network of approximately 430,000 point-of-sale terminals for electronic processing of prepaid mobile airtime. It originates transactions through a network of 75,800 money transfer locations in more than 100 countries. Euronet generates roughly 75% of its revenues from its non-U.S. operations.

First American Financial (FAF)

First American is the United States' second-largest title insurer and also offers similar products internationally. The firm also has a small presence in specialty insurance, primarily homeowners and home warranty insurance.

FBR Capital Markets (FBCM)

FBR Capital Markets is an indirect taxable REIT, a subsidiary of Friedman, Billings, Ramsey & Co, a full-service investment banking, trading, research and asset management firm. By separating the capital markets and asset management businesses, FBR Group created FBR Capital Markets to allow investors to invest in the capital markets business at FBR.

Global Industries (GLBL)

Global Industries offers construction and marine services to offshore oil and gas companies. The company constructs pipelines, installs and removes platforms, manages projects, supports construction, and provides diverless intervention.

Hilltop Holdings (HTH)

Hilltop Holdings is a holding company that anticipates seeking to make strategic acquisitions and investments with certain of the proceeds from its asset sale which was completed in July 2007. Hilltop currently owns a property and casualty insurance operation, NLASCO, located in Waco, Texas, that focuses on providing fire and homeowners insurance for low value dwellings and manufactured homes primarily in Texas and other areas of the south, southeastern and southwestern United States.

Hornbeck Offshore Services (HOS)

Hornbeck Offshore has one of the largest offshore supply vessel fleets, which it uses to transport goods and supplies to and from offshore rigs and platforms, primarily in the Gulf of Mexico. It also has a large fleet of tug and tank barges, which mostly transport petroleum in the Northeastern United States. Hornbeck has several new multipurpose supply vessels on order, which are expected to better address clients' needs for larger vessels.

Mitsubishi UFJ Financial (MTU)

Mitsubishi UFJ was formed by the 2005 merger of Mitsubishi Tokyo Financial Group and UFJ Holdings. It is one of the world's largest financial services companies, with commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing operations. Headquartered in Tokyo, Mitsubishi UFJ does business in more than 40 countries.

National Bank of Greece (NBG)

National Bank of Greece is the oldest and largest Greek bank with $150 billion in assets and over 30% market share in deposits. Through its 600 branches in Greece and 1,200 abroad, it offers multiple banking products. About 60% of its profits come from its operations in Greece, complemented by 30% from Turkey and 10% from southeast Europe. Respectively, 70%, 15%, and 15% of the company's loans (split evenly between individuals and businesses) are domiciled in these regions.

Nomura Holdings (NMR)

With almost $329 billion in assets as of Dec. 31, 2009, Nomura Holdings is the largest securities and investment banking firm in Japan. Its primary lines of business include retail investment services, fixed-income and equity trading, mergers and acquisition advisory services, merchant banking, and asset management. Nomura was founded in Osaka, Japan, in 1925 by Tokushichi Nomura II. The company is currently based in Tokyo.

RailAmerica (RA)

RailAmerica, Inc. is an owner and operator of short line and regional freight railroads in North America, operating a portfolio of 40 individual railroads with approximately 7,400 miles of track in 27 Unites States and three Canadian provinces. During the year ended December 31, 2009, its railroads transported over 800,000 carloads of freight for approximately 1,500 customers, hauling a range of products, such as farm and food products, lumber and forest products, paper and paper products, metals, chemicals and coal. The Company provides its freight services under a contract or similar arrangement with either the customer located on its rail line or the connecting Class I railroad. Contracts and arrangements vary in terms of duration, pricing and volume requirements

State Street Corporation (STT)

State Street is one of the largest trust banks worldwide, combining banking, asset servicing, and asset-management operations. The company also offers services such as foreign exchange, cash management, credit, and electronic trading to help customers negotiate complex global financial markets efficiently. State Street Global Advisors, its asset management arm, is the world's largest institutional money manager and a leading provider of ETFs.

SWS Group (SWS)

SWS Group provides securities transaction processing and other related services and operates Southwest Securities, a full-service brokerage, investment banking, and asset management firm. Its primary business is delivering securities transaction-processing services to broker-dealers, including commercial banks. Transaction processing services include integrated trade execution, clearing, client account processing, and other customized services. The company also operates a savings bank (Southwest Securities Bank) in Texas.

Tejon Ranch (TRC)

Tejon Ranch owns around 270,000 acres of land north of Los Angeles. Although at one time used almost exclusively for agricultural purposes, the majority of income is now earned through transactions related to real estate. The company owns and operates an industrial complex on the land, which leases space to industrial and commercial users, as well as ranching and recreational facilities. Agricultural operations still produce significant portions of revenue, earned through the sale of fruits, vegetables and nuts to commercial buyers

Toyota Motor (TM)

Toyota Motor Corporation has grown to become the world's largest automaker. Its brands include Toyota, Lexus, Scion, and Hino, and market share in Japan is over 45% while U.S. share is about 17%. The firm also owns nearly 23% of Denso, a parts supplier. Toyota sold 7.6 million vehicles in fiscal 2009; automotive sales were JPY 19.2 trillion. Toyota also has a financing arm, holds ownership in telecommunications firm KDDI, and manufactures homes.

Weatherford International (WFT)

Weatherford International provides a large portfolio of services, including pressure pumping, directional drilling, and artificial lift, which help boost oil and natural gas production. The firm's mainly international bases of customers are exploration and production companies, as well as national oil companies.

Disclosure: The author holds shares in BCO, COWN

About the author:

Patrick Goldin
Patrick Goldin is the General Partner of the Alain Value Fund LP, a limited partnership exercising a value-focused and bottom-up securities approach. In addition to his duties as general partner, he is a student in high school. He can be reached at patrick.goldin@alainvaluefund.com

Rating: 2.2/5 (9 votes)

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