Now I know that the 4th quarter for CAS is the worst every year because of less shipping days, but I think this has the potential to be a fantastic quarter.

Last year they did $227m in Total Revenue. Let's say they grow sales by 10% (it was 20% last quarter so I'm tring to be conservative). That puts us at roughly $250m. Now if we take Transtar's revenue from September ($18m), and multiply it by 3 we get $54m. Let's call it $50 because of the quarter. I'm expecting Total Revenue in the ballpark of $300 million.

As for Net Income, if they can hold their margins steady they'll be right around 15 million, or another .80 cents/share. That will put their TTM EPS at $2.89 or so driving their P/E at 8.5. That low number should really attract some of the value hunters as long as the Debt/Equity ratio comes down. Hopefully they pay down some of the debt and it gets below 1 which is a common pucker factor. If CAS becomes less solvent, watch out...

Looking forward, Transtar running for the next full year will bring in roughly $225 million in revenue. CAS could easily do 1.4-1.5b in revenue and earn 70m in Net Income, which would be FY 07 earnings of $3.67/share.

At the industry average P/E that's a valuation of $55/share. Needless to say, I think CAS is a strong buy right now.

The Good: Revenues and Sales growth, low P/E

The Bad: Debt levels, and low margins