Aerospace Gives Lift To Precision Castparts

If this market were in a confirmed uptrend, Precision Castparts PCP would be offering a classic example of how to cope with a shakeout.

The stock was acting like a winner until the market hit a pothole Feb. 27. Precision Castparts plunged as low as 15%, well below its 10-week moving average.

But the stock reversed that same day and closed off just 5%, and much nearer to the top of the day's range than the bottom. It's moved into record highs since then.

Precision Castparts makes specialized parts for the aerospace, industrial and auto industries.

The steel, titanium or alloy components end up in the engines that power today's huge passenger jets, for instance.

Aerospace -- an industry that's been growing on more orders for jetliners -- made up 59% of the company's sales in 2005. Utilities accounted for 18% and autos for 8%.

Earnings growth ranged from 40% to 75% over the past four quarters. Estimates for the current quarter are for a 66% gain.

After-tax margins have been trending high, at 11.1% in the last quarter.

Precision Castparts is the top stock by EPS Rating in the Aerospace/Defense-Equipment group. That group moved up to 11th place out of the 197 industries as of Friday's IBD. That's up from 65th place just six weeks ago.

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