It remains a bad time to be a steel stock, as most of the major North
American and global names are within 10% or so of their 52-week lows.
The global market remains oversupplied in most types of steel, with
sluggish non-residential construction demand leading the way, while
lower input costs have allowed non-integrated mills to continue churning
out product.
Like Nucor (NYSE:NUE), Steel Dynamics (NASDAQ:STLD)
can only do so much to stand apart from its peers. Steel Dynamics has
an enviable record of generating well above-average EBITDA per ton and
is well positioned to take advantage of growth opportunities, but
concerns about steel prices, end market demand, and import competition
linger. The shares do seem undervalued, particularly taking into account
improvements in mix and cost structure, but calling any steel (or any
commodity) company a "bargain" has to come with the warning that
estimates could easily head lower and take notions of "fair value" with
them.
Click this link for the full article:
Steel Dynamics May Have Underappreciated Growth Qualities
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