ZINC

[KC Scott]

Horsehead Holding Corp. and its subsidiaries produce specialty zinc and zinc-based products in the United States. Its products include zinc metal, which is produced as PW zinc to coat or galvanize steel; and zinc oxide with various purities, particle sizes, and customer-specific formulations, as well as an array of post-production treatments. The company also receives and recycles EAF dust generated by steel mini-mill operators. In addition, Horsehead Holding Corp. also offers zinc and copper-based powders primarily for general chemical and metallurgical applications; zinc dust for corrosion-resistant coatings and other chemical applications; and iron-rich material, a co-product of the EAF dust recycling process that is used primarily in construction materials and water treatment. Its products are used in various applications, including in the galvanizing of fabricated steel products and as components in rubber tires, alkaline batteries, paint, chemicals, and pharmaceuticals. The company was founded in 1848 and is based in Monaca, Pennsylvania.

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IPO in Aug at $18 - topped at $26 pulled below to $14.97 - Cuerent price $16.72
Excellent balance sheet - No debt
Current PE 5.66 - FWD PE 5.91

Street has tied this stock to the commodity price of zinc - although they are not miners.
Some research on global ZINC demand:

http://www.basemetals.com/html/zninfo.htm

If you share the opinion that China, Brazil, Russia, India will continue buildout of infrastructure, this stock may make a good play.
Stocks that hit initial lows like this usually test that low again - though not always
The bounce off the Dec. 22 low took it back to $18.13
A 61.8% Fibboncucci retracement would mark a potential buy point at $16.19
If it dropped below that point a test of the $14.97 low would almost be assured.



Looking at the chart, the last 12 trading days have also formed a "cup with handle" formation.
This is a very bullish formation - although buying on confirmation of the pattern would put the buy point above $18.14

http://stockcharts.com/school/doku.php? ... ith_handle

Interesting message from the Yahoo Boards:
RE: this board's discussion of ZINC using hedging, this email excerpt from the CFO to me Nov. 21

"Thank you for your interest. The change in the commodity price of zinc directly effects our selling price of our products. As you noted, we purchase zinc scrap based upon the same commodity price, therefore our costs also move directly with the commodity price. This is for approximately 40% of our feedstock. The balance is obtained from processing eaf dust resulting in a low fixed cost feed. As a result, 60% of our margin compresses or expands as the commodity price changes. We generally aim to protect the downside for this 60% via hedging. As a new public company, I do not think the business model is fully understood yet. In the end, we would expect to outperform the miners.
Bob"

RE: the relationship between recent ZINC commodity price and ZINC stock price

Zinc commodity Nov. 1 = $1.30/lb
ZINC stock price Nov. 1 = $23/share

Zinc commodity Dec. 20 = $1.05/lb
ZINC stock price Dec. 20 = $15/share

Analysis: commodity price drop = 25%, stock price drop = 35%
Observation: Wall Street trades ZINC as though it is a miner of zinc commodity.

Technical analysis:
Positive divergences in RSI, MACD, OBV, Accum/Distr, CMF, MFI, PVO, ROC

If this means nothing to you, the short answer is that it is very bullish, if not downright ideal.

The ZINC share price drop from $20 to $15 recently coincided with the recent downdraft in the stock market. The S+P fell from 1520 to 1440 in this downdraft.

I'll look at ZINC as it tries to form a base with buy potential point(s) as noted

[KC Scott]

BOT 650 Shares ZINC @ $14.40

[Trampis]

Nice entry point! Safe entry point. Chart history sure shows a nice bounce whenever it bottoms...perhaps a 2 point gain this time? Regardless, i like your entry point.

[KC Scott]

I'm playing for $18 - although I may hold longer.
Very low volume stock, so it's gonna be interesting how it play out

[KC Scott]

Stopped out of ZINC last week at 13.40 for a 7% loss