Seeking Alpha: Nyrstar Far From Health

It's not hard to find a base metal mining or smelting company whose stock is down over the last twelve months. In fact, the bigger challenge is finding a winner. So it's not necessarily an unforgivable black mark against Nyrstar (OTC:NYRSY) (NYR.BR) that the shares have been so weak (down 30%) over the past year.

The bigger problem here is that the company has made a series of poor capital allocation decisions and may well find it next to impossible to cut costs to a point where the returns from the business are attractive again. But there's another side to the story, one that may appeal to more trading-inclined investors. This is one of those rare stories where almost every sell-side analyst covering the stock is negative on it (either rating it a Sell/Underperform or a weak hold), and if zinc prices stage a recovery (and/or the company irons out its operational issues), these shares could bounce.

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Nyrstar Far From Health

Investopedia: Play Steel Dynamics For The Next Materials Story

Every commodity and resource boom is a little different, but it is not uncommon to see divergent trends between materials. Materials like copper and iron ore can have their runs only to be followed later by the likes of steel and aluminum. With steel prices starting to firm up, and industrial conditions staying strong, now might be a good time to consider the likes of Steel Dynamics (Nasdaq:STLD).


A Solid Open to the Year
Due in part to strong pricing, Steel Dynamics surpassed the average revenue estimate for the quarter. Investors should note, though, that there was a very wide range of published estimates ($1.1 billion to $2.2 billion). In any case, revenue rose nearly 30% from last year and almost 32% sequentially. Average selling prices rose 21% from the year-ago level, and more than 18% sequentially, while shipments rose about 10% on a sequential basis. (For more, see Steel Cycle Looks Good.)

The company's cost and profit performance was also stronger this time around. Scrap costs were higher, but operating efficiency handily surpassed that increase. Gross margin jumped more than a full point from last year, and nearly six full points from the fourth quarter. Operating margin improved even more - up more than 160 basis points from last year and more than tripling from the fourth quarter.


Read the full piece here:
http://stocks.investopedia.com/stock-analysis/2011/Play-Steel-Dynamics-For-The-Next-Materials-Story-STLD-NUE-AKS-PKX-CMC0420.aspx