- Except for its IPO year of 2014, TimkenSteel had incurred losses every year since then. The losses were because it was operating below the breakeven levels.
- There are 3 ways to overcome this - reduce cost, increase sales volume, and increase selling prices. TMST has taken steps to reduce its melt capacity by 60%.
- Apart from the cost reduction, there are also prospects for increased demand for steel. Steel prices are also currently in the uptrend part of the price cycle.
- There are thus prospects for TMST to return to profitability. TSMT is currently trading at an undemanding Price to Book of 1.1 and an EV/EBITDA of 5.0.
For further details see:
TimkenSteel - Time To Go In As The Worst Is Behind It