(MTLM) - company surprised to the upside by an impressive 28.4%

Metal Management, Inc. (MTLM), a Zacks #1 Rank stock, surprised to the upside by an impressive 28.4% when it posted fourth-quarter fiscal 2006 earnings per share of 86 cents. Analysts' estimates for this quarter and for fiscal 2007 have been trending higher. MTLM has been active in the acquisition arena—announcing two purchases since early-March. The company has a price-to-book ratio of 1.9, compared to the market's multiple of 3.8. Full Analysis Metal Management, Inc. is one of the largest full service metals recyclers in the United States, with approximately 50 recycling facilities in 16 states. The company is primarily involved in the collection and processing of ferrous metals (iron and steel) and non-ferrous metals (principally aluminum, copper, nickel-based, titanium and high-temperature alloys). On May 25, 2006, MTLM reported fourth-quarter fiscal 2006 profits of $22.6 million, or 86 cents per share, compared to $16.2 million, or 64 cents per share, during the prior-year period. The Street was expecting 67 cents, thus, the company surprised to the upside by an impressive 28.4%. Net sales were down 6.1% to $434.1 million. The consensus estimate for this quarter currently sits at 77 cents per share. When compared to the consensus of 60 days ago, analysts upped their forecasts by 10.0%. Profits forecasts for fiscal 2007 have risen 3.2% to $2.92 per share over the same period of time. On Mar 1, 2006, MTLM announced that it acquired substantially all of the assets of privately-held Morris Recycling, Inc. Morris Recycling, now known as Metal Management Mississippi, has 10 facilities and processes approximately 240,000 tons of ferrous metals and 32 million pounds of nonferrous metals on an annual basis. The acquisition made a positive impact in the last month of MTLM's fourth quarter. The company followed up its acquisition of Morris by purchasing a recycling facility in East Chicago, Indiana from OmniSource Corporation. The facility handles around 430,000 tons of ferrous scrap metal and approximately 10 million pounds of non-ferrous scrap metal annually. On May 23, 2006, the Board of Directors declared a quarterly dividend of 7.5 cents per share of common stock. The company has a current dividend yield of 1.0%. MTLM's return on equity nearly doubles that of the industry average—17% compared to 9%. MTLM is currently trading at a valuation of 12.3x trailing 12-month earnings and at 9.9x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.5x trailing 12-month earnings and at 15.3x its current fiscal-year estimated earnings. The company has a price-to-book ratio of 1.9, compared to the market's multiple of 3.8. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. Blog Home