Superman may have been strong enough to bend steel, but it takes a monster to crush titanium. Such a monster has reared its fearsome head, and its name is global recession.
For titanium manufacturers like RTI International Metals
Boeing continues to injure the company with these Dreamliner delays, making it difficult to maintain efficient operations at two of RTI International Metals' fabrication facilities. Meanwhile, RTI International Metals has not been immune to the sharp drop in base metal prices that has blasted miners like Rio Tinto
The recession monster has not spared RTI International Metals' competitors. Allegheny Technologies
What's the titanium lining?
While acknowledging significant challenges, RTI International Metals CEO Dawne Hickton expects to sell 10 million-12 million pounds of titanium products in 2009 while maintaining positive net earnings for the full year. Furthermore, the company's balance sheet does appear solid, with more cash than debt, an undrawn credit facility of $200 million, and only $1.4 million in debt payments coming due in 2009. With those considerations in mind, and following the more than 75% collapse in shares from the 52-week high, RTI International Metals is worth keeping an eye on from a value-investing perspective.