voestalpine's Positive Attributes Should Become Clearer In The Coming Years

Austrian steel company voestalpine (OTCPK:VLPNY, OTC:VLPNF, VOES.VI) may be the bane of copy editors for its penchant for using only lower-case letters, but it has proven itself to be a different sort of steel company - one that reinvests continually and pursues a high-tech, high-quality strategy that emphasizes profit per ton over volume of tons sold. That philosophy, and a history of above-average ROIC generation, has allowed voestalpine to outperform many of its peers over the longer term, including the likes of Acerinox (OTCPK:ANIOY), ArcelorMittal (NYSE:MT), Nucor (NYSE:NUE), and ThyssenKrupp (OTCPK:TYEKF), though Steel Dynamics (NASDAQ:STLD) has outdone them all by a wide margin.

Steel stocks in general, and European steel stocks in particular, haven’t done so well this year, and voestalpine is down about 12% (worst among that group). I believe this is creating an interesting opportunity; although the steel cycle may be at or past its peak momentum, I believe the company’s differentiated strategy will lead to better results, and better cash flow, down the road.

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voestalpine's Positive Attributes Should Become Clearer In The Coming Years