I haven’t been very bullish on U.S. steel companies, and I don’t feel like I’ve missed out on much, with Steel Dynamics (STLD) and Nucor (NUE)
both down almost 10% over the past year. Steel Dynamics’ share price is
getting more interesting again, but I’m concerned that the market will
take the restocking demand we’re seeing now as a new starting point and
overestimate potential volume and price growth in 2020. To that end, I
think Steel Dynamics management is probably overly optimistic with
respect to its demand and pricing expectations for the year.
Even
though I’m concerned about where expectations are now for the sector, I
do see some potential value here. I’d rather let the reset play out
first, as I think Steel Dynamics shares will retest the $20s, but if and
when that happens, this would be a name to reconsider.
Read the full article here:
Wobbly Pricing And Uncertain Demand Weigh On Steel Dynamics
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