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Friday, January 23, 2015

Seeing Timkensteel as takeover candidate, Hodges fund buys its shares, (NYSE: TRI), (NYSE: X)

Timkensteel Corp, a producer of high-quality steel used in products ranging from oil rigs to fighter jets, looks to be an attractive takeover candidate as its shares slide, said Eric Marshall, lead portfolio manager of the $1.3 billion Hodges Small Cap fund. Marshall, whose fund is among the top-performing small-cap funds over the last five years, has added more than 100,000 shares of the $1.4 billion market cap company to his portfolio.Shares of Timkensteel have fallen 20 percent since the start of the year, and are down more than 30 percent since the company was spun off from parent Timken Co last July as investors have moved away from anything related to the energy sector. Energy-related products account for approximately 30 percent of Timkensteel's revenues, according to Thomson Reuters data."If you look out across the universe of steel companies, Timkensteel is one of the best takeout candidates" because it makes higher quality steel that could be easily integrated into a larger competitor such as United States Steel Corp, Marshall said.Marshall said the disclosure on Jan. 7 by privately-held Ellwood Group, which is a both a customer and competitor to Timkensteel, that it took a 5 percent stake in the company between the end of December and early January bolsters the chance that Timkensteel could be acquired.

Thomson Reuters Corporation (Thomson Reuters) is a provider of information for the world?s businesses and professionals. Shares of TRI traded higher by 0.33% or $0.13/share to $39.95. In the past year, the shares have traded as low as $33.21 and as high as $41.44. On average, 748460 shares of TRI exchange hands on a given day and today's volume is recorded at 538060.

United States Steel Corporation is an integrated steel producer. Shares of X fell by 8.16% or $-1.8537/share to $20.86. In the past year, the shares have traded as low as $21.39 and as high as $46.55. On average, 7284510 shares of X exchange hands on a given day and today's volume is recorded at 12238294.



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