Don’t bet against Metalico, Inc.

Metalico, Inc.  (Public, AMEX:MEA) has been on fire lately, up 91.76% in the last 52 weeks.

And it’s been almost a years since I wrote a little article called “It's time for Metalico (MEA) to Ride the Lighting” back in July of 2007.

In the article I wrote: My fellow Americans, Metalico is about to Ride the Lighting and increase their annual revenue 55% from $212 million to $329 million. And that’s just the beginning; add on their growth rate of 10% and they are going to be sitting pretty with annual revenue of $362 million. Analysts are expecting earnings of just .62 for the entire year of 2008 – we think it’s just a matter of time before the upgrades start coming in.

Everything I said back then has come true – they rode the lighting all the way up to $11.71. The question now is, can they keep this momentum going?

Metalico has a lot of things going for them.

They posted a record year for 2007,  Net income for the year ended December 31, 2007 was $14.8 million or $.50 per share (on a diluted basis) on sales of $334.2 million, compared to net income of $10.3 million or $.40 per share (on a diluted basis) on sales of $207.7 million for the year ended December 31, 2006. These results represent an increase in sales of $126.5 million or 61% over the 2006 results. Operating income for 2007 increased $9.5 million or 48% to $29.4 million, compared to $19.9 million for 2006.

Metalico's Scrap Metal segment obtained year-over-year unit volume increases of approximately 44% for ferrous and 19% for non-ferrous. The Lead Fabrication segment experienced approximately 22% lower year-over-year unit volume. Non-ferrous metal prices saw an increase of 58% year over year, while prices for ferrous and fabricated lead products also rose year over year by 20% and 53%, respectively although lead as quoted on the LME declined in price by approximately 27%.

In addition, strong worldwide demand for recycled metals has lifted steel prices. They just announced that April 24th will be their Q1 earnings release date. Time to place another bet on Metalico.

Article written by Eric Cheshier

Co-Founder of theStockMasters.com

If you liked this article, Eric Cheshier also contributes to the Master Picks Newsletter and the Quant Method , only available at WallstNewsletters.com.