Mohnish Pabrai, Dalal Street Buy Some More Horshead Holding Corp. Shares

Dalal Street, the fund managed by Mohnish Pabrai, disclosed, in a new filing with the SEC, buying some more shares of HORSEHEAD HOLDING CORP. (NASDAQ:ZINC). According to the filing, Dalal Street purchased in total 248,575 shares of the company, raising its holding to almost 6.3 million shares. The additional shares have been acquired in three transactions, the average price amounting to $13.99 apiece.


Mohnish Pabrai’s fund has been bullish on Horsehead Holding for some time now. Just a couple of weeks ago, the fund disclosed buying some other 327,000 shares of the company. However, in those deals, the price has been a bit lower, at $12.00 and $12.75 per share.

Horsehead is engaged in production of zinc and nickel-based products, with main markets in North America. The stock of the company already gained over 38% since the beginning of the year, and trails a forward P/E ratio of 18.7. At the end of October, the company conducted a public offering in which it sold 5.5 million shares of common stock for $12.00 apiece, plus additional 825,000 shares offered for underwriters. The net proceeds from the offering amounted to over $72 million.

For the previous quarter, Horshead posted a net loss of $3.5 million, equal to $0.08 per diluted share. The company managed to narrow its net loss over the year, from $9.1 million in the same period of 2012. The company is also finishing the building of its zinc production facility in North Carolina, and plans to begin production by the end of 2013. In terms of EBITDA, the company plans to gain between $90 and $110 million. The total costs of the project are situated at around $490 million. Aside from that, Horshead is expanding another its facility, the project coinciding with the closure of its Monaca zinc oxide refinery planned for the end of the year.

Chuck Royce’s hedge fund Royce & Associates also reported holding shares of Horsehead Holding. Its stake amasses around 4.5 million shares.

Disclosure: none

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