Wednesday, July 25, 2018

Steel Dynamics: Running At Full-Throttle

With strong spreads, very healthy volume growth, and more clarity on steel import restrictions, Steel Dynamics (STLD) has done a little better since my last update, with the shares up around 7% - good for a little bit of outperformance versus the S&P 500 and more or less matching Nucor (NUE), while outperforming Ternium (TX), Gerdau (GGB) and ArcelorMittal (MT) by wider margins.

The story remains more or less the same here, as there is a tug-of-war between what is likely to be a series of strong quarterly results and institutional investors’ desire to leave the table before prices start to roll over. I still believe there is upside into the $50s with Steel Dynamics shares, and I continue to believe this is an exceptionally well-run steel company with leverage to strong demand in construction and a range of manufacturing/industrial end-markets. I also believe that this is not a stock that I’d consider for a long-term commitment, and there are some hints of weakness here and there in the end-markets to consider.

Continue here:
Steel Dynamics: Running At Full-Throttle

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