Howmet Aerospace: The SpaceX Turbine Scare Is A Buying Opportunity

Blake Callahan 952 Followers Follow Summary Howmet Aerospace is a buy after an overdone selloff triggered by SpaceX/Tesla's turbine blade plans, which pose no near-term threat. HWM's core moat is protected by technical expertise, multi-year backlogs, and sole-supplier long-term agreements across commercial and defense aerospace. Financial strength is evident: 24% YoY revenue growth, 37.7% EBITDA margin, $838M YTD free cash flow, and ongoing share repurchases and dividend increases. Risks include potential new entrants and aerospace partner disruptions, but capacity expansions and strong demand underpin a compelling forward earnings profile. Alllex/iStock via Getty Images Market Overreaction Creates An Opportunity Elon Musk has announced that SpaceX and Tesla will begin to enter natural gas turbine blade production in its Bastrop, Texas facility. Howmet Aerospace's ( HWM ) shares have sold off sharply This article was written by Blake Callahan 952 Followers Follow Blake Callahan is an investor and writer focused on identifying stocks in the early stages of a re-rating. Companies where improving fundamentals, industry position, or earnings power have shifted before the market has fully repriced the stock to reflect it. His process starts with quantitative screening, including tools such as Seeking Alpha's own Quant Ratings, to surface candidates where the numbers are moving before the market has caught up.Every investment that clears that initial screen is then run through a structured, rules-based framework Blake has developed and refined over years of investing. We look at balance sheet quality, valuation, and spend time on the short reports among many other gates each investment must pass through. The framework exists to confirm or kill a thesis, not to build one. If the stocks pass but the quantitative signal isn't durable, the idea doesn't survive the process, no matter how good the story sounds.Blake's primary coverage is technology and large-cap names, with select coverage in industrials and other industries where a structural shift creates an opportunity the market hasn't caught up to. He brings professional experience in financial advisory and a formal background in accounting to his research, and applies the same process to every name he covers. Analyst’s Disclosure: I/we have a beneficial long position in the shares of HWM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.