USAP - Improving Stainless Demand And Bottoming Markets Encouraging For Universal Stainless & Alloy Products

• Stainless markets are lagging hot-rolled steel, but are still recovering strongly, with healthy demand from auto and appliance markets driving the initial recovery.
• Aerospace de-stocking will likely end in 2021, with build-rates slowly improving as Airbus and Boeing ramp up production ahead of what I expect will be normalization in 2023.
• Past trough-to-peak moves for USAP have seen the shares appreciate around 4x to 9x off lows, and the shares look fundamentally undervalued in the near term below $11.
• USAP is not a good candidate for long-term buy-and-hold, but has speculative appeal on rebounding stainless and specialty alloy markets.

For further details see: