Haynes International, Inc. (NASDAQ:HAYN) is an industrial goods manufacturer that has been operating internationally for more than 100 years. It maintains a position as one of the world’s largest producers of high-performance alloys by specializing in technologically sophisticated products, such as those which are corrosion or heat resistant. This allows them access to specialized manufacturing customers in the aerospace, power generation, and chemical treatment industries. Using the recently revealed Q2 results, this article is going to dig into the performance of Haynes, benchmarked against some larger competitors, to find out more about the stock’s gradual decline over the year.
When discussing the financial results of Haynes International, Inc. (NASDAQ:HAYN), the discussion immediately turns to the company’s earnings, which have recently missed analyst targets of $0.57 by $0.05, meaning that the company’s income for the year fell just $600,000 short of their expected $7million objective, an 8.7% miss. The result of this miss has then been an institutional sell-off of the stock, as large funds reduce their exposure to the stock’s volatility.
In viewing this setback, it is important to notice that the reason for the missed estimate is a decline in the profitability of the company, despite an increase in the actual revenues of the company. That being said, competitors of Haynes International, Inc. (NASDAQ:HAYN) have also shown missed earnings expectations, with Allegheny Technologies Incorporated (NYSE:ATI) having missed their out consensus target by a massive 47% due to similar top-line problems. From there, analyst price targets for the industry group have declined more for competitors ATI and ThyssenKrupp AG than they have for HAYN, to the point at which HAYN seems to be maintaining the strongest relationship against its proportionately expected stock price.
|Company Name (Ticker)||Average Analyst EPS Forecast||Actual EPS Reported||% Surprise|
|Haynes International (HAYN)||$0.57||$0.52||8.7%|
|Allegheny Technologies (ATI)||$0.17||$0.09||47%|
In order to get a better idea of how it is that an investor can use Haynes International, Inc. (NASDAQ:HAYN) earnings release information to establish an actual investment thesis, an investor needs to dig into the comparative earnings of the company to determine if there is a comparative opportunity to buy. Specifically, an investor will want to determine whether or not the company is better prepared to take advantage of cyclical growth than its competitors, and therefore realizes proportionately greater volumes of earnings during a market upturn than its competitors.
With respect to the cyclical top-line performance of Haynes International, Inc. (NASDAQ:HAYN), the company has shown an ability to grow its revenues annually by 8% per year since 2009, which is an impressive feat when seeing how it is that competitor Allegheny Technologies Incorporated (NYSE:ATI) has actually shrunk by 4% over the same period, and ThyssenKrupp’s 4% per year growth. This growth demonstrates the benefit of Haynes International, Inc. (NASDAQ:HAYN)’s expertise, and ability to capture market share with its specialized product base, despite declining growth within the industry itself.