For full disclosure I've been a long time holder of MLI. I love this company for its fundamental strength: They are a market leading, cost-advantaged provider of copper and brass tubing, fittings, and valves for the construction and HVACR markets. The company repaid all its long-term debt a couple of years ago, and has diligently expanded and upgraded its manufacturing facilities. They have modest capex requirements, and have delivered positive annual cash flow every year since 1992. While the 40%+ ROIC margin for 2022 was due to last year's unique environment (exceptional demand for building supply, high copper price, material shortages), they should easily out-earn their WACC year after year. The company trades at a very modest 11.1x next year EPS (based on a single analyst's estimate).
The stock took a huge beating following its earnings release, due to events beyond management's control: The business was impacted by lower copper prices, a tornado destroyed one of its manufacturing locations, and two separate factory fires (one of them caused by a third-party contractor) also impacted production.
More recently, though, MLI is showing signs of bottoming out. On the 1-hr chart an inverse head-and-shoulders pattern has emerged, and the stock looks set to break out from its declining short-term trading channel. There's also a bullish Black Swan pattern visible on the chart (patterns and channels drawn using @LonesomeTheBlue's fabuluous indicators). I don't usually pay much attention to Black Swan patterns but, according to the HPP indicator, for this ticker/aggregation period Black Swans sport an impressive win rate and profit factor.
I am looking to add to my long position with a T1 at the 3-month POC line (around 81). SL would be at the VWAP since the August 21 low.
The stock took a huge beating following its earnings release, due to events beyond management's control: The business was impacted by lower copper prices, a tornado destroyed one of its manufacturing locations, and two separate factory fires (one of them caused by a third-party contractor) also impacted production.
More recently, though, MLI is showing signs of bottoming out. On the 1-hr chart an inverse head-and-shoulders pattern has emerged, and the stock looks set to break out from its declining short-term trading channel. There's also a bullish Black Swan pattern visible on the chart (patterns and channels drawn using @LonesomeTheBlue's fabuluous indicators). I don't usually pay much attention to Black Swan patterns but, according to the HPP indicator, for this ticker/aggregation period Black Swans sport an impressive win rate and profit factor.
I am looking to add to my long position with a T1 at the 3-month POC line (around 81). SL would be at the VWAP since the August 21 low.
Trade active:
Added to my position.
Trade closed: stop reached:
Stopped out on the drop in the morning. I don't see any economic or company-specific news that would explain the move, but it is broadly in line with other infrastructure development stocks. For examples, compare to PAVE and its holdings.