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June 25, 2006 Stock Pick: Empire Resources, Inc. (ERS)

Stock Price: $13.00

Empire Resources engages in the purchase, sale, and distribution of aluminum semifinished products in the U.S., Canada, Europe, Australia, and New Zealand. The company serves the transportation, automobile, housing, appliance, and packaging industries.

Right now, the demand for aluminum is strong across several industries that ERS serves. ERS hit a high of $64.20 less than two months ago. The stock dropped due to concerns over profit not growing as fast as revenue. Revenue grew 24% in Q1 while net income rose 9%.

ERS became significantly overvalued and is now significantly oversold and looking very attractive. ERS has strong support between $12.00 and $13.00.

ERS is currently trading at a market cap of $127.08 million with sales last year of $358.47 million creating a situation where ERS is trading at a price to sales of only 0.33.

Net income came in at $9.54 million for 2005. ERS is now trading at a PE of only 13.36 million.

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