Analyst Allen L. Jackson found an unusual item this week in Allegheny Technologies' (ATI) 10-K. On page 97 of its 2016 10-K, ATI discloses that its auditor identified a material weakness in internal control of the financial reporting of its deferred income tax asset valuation allowance. This disclosure means that ATI lacked the adequate processes in place to prevent a material misstatement of its financial position. Companies with a material weakness in internal control over financial reporting are more likely to have to restate their earnings and are at a higher risk for a stock price crash. I highlighted the company in 2015 for its unusual pension plan assumptions, and that issue persists today. ATI’s pension assets earned a return of 6% in 2014, -2% in 2015, and 4% in 2016.

Source: Forbes March 03, 2017 19:50 UTC