Hexcel Corp (HXL)

wind play.

Very solid company with great management and good growth prospects selling at a significant discount. Net tangible assets are worth $4.66 per share and over the past five years, their average earnings have been 84 cents per share and average operating cash flows have been 92 cents per share. While the economic downfall has obviously hampered the aerospace industry and this will harm their revenues since Boeing and EADS are their biggest customers, they are holding up reasonably well thus far and have improved their cost picture. Moreover, they still have growth in other sectors, including carbon fiber and materials for wind turbine blades.

HXL has a moderate degree of leverage with high liquidity and good cash flows. They are paying down debt at the moment and have slowed capital expenditures in the current environment. Even going with a fairly conservative estimates on this with 60 cent per share "added value" each year with a small 3% growth rate and a 12% cost of capital, I still come up with a valuation of $11.28. Assuming they can simply continue what they've been doing, I come up with a valuation closer to the $17 - $18 range. 5-year upside is probably in the $30 - $35 range. Based on all of this, I'm going with the green thumb.

If you want to read more, see my write-up at Seeking Alpha:

http://seekingalpha.com/article/134146-hexcel-value-in-the-honeycomb