Chart Industries (GTLS)

Stock of the Day
Chart industries (GTLS)
Friday’s Opening Price: GTLS – $29.49

Sector: Industrial Goods
Industry: Metal Fabrication
52-week Price: $31.37 – $11.16

Chart Industries (GTLS) was first featured on June 13, 2007 at $23.05 as a Fresh IPO Idea. The stock had 121 institutional supporters at the time, a number that has increased 54% to 187 with a large influx of cash. Almost $500 million of shares have been purchased in the most recent quarter while only $65 million shares were sold, a sure sign of institutional accumulation. The number of shares held has doubled from 15.73 million in June to 31.82 million today.

This is the type of activity that I like to see in a young growth stock that is currently building a cup shaped base after a prior uptrend. It has been making recent daily screens and is currently on the top of my potential buy list. I don’t own shares as I write this analysis but I will be looking for a handle formation to jump into a position. The ideal trade setup is located below with proper position sizing and risk-to-reward margins based on a moving average (swing) trade (not a cup with handle because a handle hasn’t formed).

GTLS was Featured in these posts in June 2007:
6/13/07: Fresh IPO Ideas, GTLS – Chart Industries Inc. – $23.05
6/20/07: Young Guns Taking Off, GTLS – $24.73

Institutional Analysis:
Total Institutions: 187
Money Market: 97
Mutual Fund: 85
Other: 5

New Positions: 86
Positions Sold: 13
Shares Held: 31.82 mil
Shares Held Previous Period: 15.59 mil

Shares Bought: 18.75 mil
Shares Sold: 2.51 mil
Value of Shares Bought: $486.9 mil
Value of Shares Sold: 65.2 mil

Top Institutional holders; Shares Held:
Capital Research and Management Company; 2,266,400
Gendell, Jeffrey L.; 1,686,400
Delta Partners LLC; 1,629,840
Smallcap World Fund; 1,613,500
Neuberger Berman, LLC; 1,318,500

Potential Trade Set-up (moving average setup – not cup w/ handle):
Ideal Entry: $28.00
Risk is set at 1.0% maximum of total portfolio or $1,000 of $100k
Stop Loss is % or $25.76
Number of Shares: 446
Position Size is $12,500
Risk is $2.24
Target is $38
Risk-to-Reward is 4.46-to-1

*The target is an educational guess based on the depth of the cup shaped pattern*

Key Fundamental Numbers:
Market Cap.: $820.9M
Outstanding Shares: 27.6M
Float: 27.1M
ROA (%): 4.41%
ROE (%): 13.78%
P/E (TTM): 24.76
PEG Ratio: 0.88%
Price to Sales Ratio: 1.35x
Price to Book Ratio: 2.92x
Price to Cash Flow: 15.78x
Total Debt/Total Capital: 47.04%
Gross Profit Margin: 28.48%
Operating Profit Margin: 12.07%
Net Profit Margin: 5.19%

Growth Rates:
EPS (MRQ): 53.17%
EPS (TTM): 486.10%
Revenue (MRQ): 29.54%
Revenue (TTM): 29.64%
3-Yr EPS Rate: 16%
3-Yr Sales Rate: 31%

*** For 2007, analysts estimate GTLS will earn $1.62 per share, a 55.77% increase over 2006 results***

Earnings:
Yearly (2009): $2.63E
Yearly (2008): $2.12E
Yearly (2007): $1.62E
Yearly (2006): $1.04

Revenue (millions):
Yearly (2006): 537M
Yearly (2005): 403M
Yearly (2004): 306M
Yearly (2003): 266M
Yearly (2002): 276M

Net Income (millions):
Yearly (2006): 26,895
Yearly (2005): 8,352
Yearly (2004): 22,600
Yearly (2003): (7,887)
Yearly (2002): (134,002)

Company Profile:
Chart Industries, Inc. (Chart Industries) is an independent global manufacturer of engineered equipment used in the production, storage and end-use of hydrocarbon and industrial gases. The Company supplies engineered equipment used throughout the global liquid gas supply chain. The largest portion of end-use applications for its products is energy-related, accounting for 56% of sales and 58% of orders during the year ended December 31, 2006, and 79% of backlog in 2006. The majority of its products, including vacuum-insulated containment vessels, heat exchangers, cold boxes and other cryogenic components, are used throughout the liquid gas supply chain for the purification, liquefaction, distribution, storage and end-use of hydrocarbon and industrial gases. The Company operates in three segments: Energy and Chemicals (E&C), Distribution and Storage (D&S) and BioMedical. On May 26, 2006, the Company acquired Cooler Service Company, Inc., an air-cooled heat exchanger business (CSC).