Buy Harsco (NYSE: HSC)

Target: $30

Buy Up To: $23

Options Trade: Buy to open the July 20, 2018 call on Harsco (NYSE: CC) with a strike price of $20 at $2.40 or lower. Symbol (HSC180720C20)

Harsco is the kind of stock I love. It is underfollowed by Wall Street with just two analysts following it. The company’s base business seems pretty boring- it supplies services to steel and metal manufacturers and components to oil and gas companies.

But it is the perfect play on the growth that domestic metals and industrial companies will enjoy due to import tariffs.

Whether steel tariffs stick longer term or not, new facilities are being brought online. U.S. Steel is restarting an idle plant in Pittsburgh. Alcoa and Century Aluminum are reopening old plants. Harsco handles much of the work for these plants outside of actual production. Think of it as the maid and caregiver for these plants.

Metals companies, who are loathed to take on more fixed costs than necessary, are happy to outsource this work to Harsco.

The company’s backlog of orders rose 60% as of the fourth quarter and earnings are expected to grow 33% this fiscal year and 26% in 2019.

The company presents at the Seaport Global 2018 Transports and Industrials Conference this week on Wednesday, March 21st. It’s quite possible the stock gets a bump as more investors become familiar with this terrific growth story.

My target is based on a 24 price to earnings (P/E) on the 2019 estimate of $1.25