Weekly Stock Pick

Another wild ride on Wall Street again last week! As the credit freeze warms up this week, there could be some buying of obliterated stocks. It could also include wild swings and might retest lows as traders and investors focus on the very good possibility of a declining economy and recession realities. This week I’m looking to buy select stocks with strong balance sheets, very low price to earnings ratios, and revenues from global operations. My main concern right now is if there will be enough money flow back into the market this week to provide some support, or the bottom drops out on stock prices again later in the week.

Scanning the charts this week I’ve come up with a strong buy candidate, but if the general market goes the other way, its stop-loss again probably on my main stock pick of the week. My pick this week is a diversified specialty metals producer with a PE ratio of under 4, compared with the S&P500 trading at just under 12. With Friday’s closing price its discounted 75% from its year to date high, and it has revenue from global operations. Just the kind of company I’m looking for to possibly invest in long term.

Buy Long Allegheny Technologies. Ticker ATI

Buy Entry: Buy at 20.02 to 24.32

Stop-Loss: 19.75. If support at 20 fails, the price could easily hit 16 or lower, which would be a once in a lifetime buy in my opinion.

Take Profit Areas:

34.83 to 35.78

46.13

49.37

The stock market has gone down so much, or should I say, been decimated on crisis of confidence coming from the credit crunch liquidity crisis. In my opinion it’s a buying opportunity for select stocks that have a strong balance sheet, selling at extremely low PE ratios, with global operations and exposure. ATI fits my investment model here. Jim Cramer said last week. “Don’t buy ATI. It should not be considered at least until the Boeing strike is over.” In my opinion the Boeing strike should not affect ATI’s EPS that much with their diversified revenues streams, and Cramer has been more wrong than right lately, just as anyone else has been, myself included. My lesson learned from this financial chaos, is don't go against the fear component of the market even though some equities look super-cheap right now. Cash is still king right now.

Allegheny Technologies Company Profile from Google

Allegheny Technologies Incorporated (ATI) is a diversified specialty metals producer. The Company’s products include titanium and titanium alloys, nickel-based alloys and superalloys, zirconium, hafnium and niobium, stainless and specialty steel alloys, grain-oriented electrical steel, tungsten-based materials and cutting tools, carbon alloy impression die forgings, and grey and ductile iron castings. ATI’s specialty metals are produced in a range of alloys and product forms, and are selected for use in environments that demand metals having hardness, toughness, strength, resistance to heat, corrosion or abrasion, or a combination of these characteristics. The Company focuses its technological and unsurpassed manufacturing capabilities to serve global end use markets with diversified and specialized product offerings. It operates in three business segments: High Performance Metals Segment, Flat-Rolled Products Segment and Engineered Products Segment.

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Click the Allegheny Technologies Stock Chart for a Larger View