בס״ד

Turning Their Weapons Against Them (ATI)

Posted on August 15, 2022

Over the last several weeks, we’ve experienced a bear market rally that’s been swift, sharp and in the case of numerous individual stocks, absurdly overdone.

A good dozen such issues came up on our radar of late, and we’ve selected what we feel is the best of them to trade today.

That’s not to say the general rally has come to an end.  Indeed, it may still have legs.

But this stock, at least, is punch drunk and wobbling, and in our view, looks ready for the hammer.

ATI Inc. (NYSE:ATI) is a specialty steel producer in a trendy market – aerospace and defense.

And since war is ‘in’ these days, one would expect to see a stock like ATI’s to rise.

But by how much?

And is there no limit?

Get real, guys!

It’s not only the 56% gain in the last seven weeks that caught our eye.  No, no…

Rather, the 32% leap that occurred over more or less the last week (!) provided the crème fraîche frosting on this old banana cake.

Chow Down, Gang!

Here are the fundamentals –

  • ATI has a P/E of – get this – 897.43 (analysts are expecting a 5175% jump in earnings in the next year).  We’ll see…
  • Dividend Yield is NIL,
  • Price to Book is a head-shaking 5.13, and
  • Debt to Equity is sky high at 2.28.
  • Moreover, sales have DECLINED over the past five years by 2.20% per annum on average.

In short, it doesn’t appear so favorable for the bulls on the fundamental front.

So what’s to get thrilled about…?

Have a look at the technicals –

The downside awaits!

If Hashem wills it.

!שכן יהי רצון

With kind regards,

Hugh L. O’Haynew

 

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