I wasn't all that interested in Insteel (IIIN) back in January
of this year, as I was worried that this manufacturer of steel
reinforcing products would struggle due to an unbalanced tariff policy
that basically forces the company to buy overpriced inputs (wire rod)
but compete with cheaper downstream imports sold by companies that can
avail themselves of cheaper wire rod in international markets. Much of
that has come to pass, with the shares basically flat for the year and
sandwiched between the performance of other steel companies like Commercial Metals (CMC), Nucor (NUE), and Steel Dynamics (STLD).
In
that last article, I said that Insteel would be more interesting below
$20/share, and investors got that chance a few times this past year,
with those who bought below $20 at least showing a profit for their
efforts. Although I think pricing pressure should ease up some on
Insteel in fiscal 2020, gross profit margins are going to remain under
pressure and I expect this to be another challenging year.
Click here to continue:
Insteel Struggling Under An Unbalanced Tariff Policy
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