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Varchild2008 (85.77)

Buy Steel for Bargain Bin Prices . . . almost

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August 11, 2008 – Comments (1) | RELATED TICKERS: MTL , X , SID

Steel Sector has been selling off into a strange abyss of late.  This is a time when investors are bailing and panicing out of steel and a smart investor can sit back, biding his/her time, and strike with a big BUY at a really really low price.

A smart investor looks to 2009 and 2010 in regards to stocks like:

X  (U.S. Steel)
NUE  (NUCOR)
MTL  (Mechtel)
AKS   (AK Steel)
SID  (CSN - Brazil)

And so many others.

Virtually all steel stocks are nearly at bargain bin prices.  SID is going for less than 10% greater than it was at the beginning of the year.  I'm looking to strike big on this stock if it reaches $30 a share.

U.S. Steel is probably the biggest play with a Standard and Poor's 12 month 2009 target price of $235, this stock is trading around $128 today!

The commodity pricing on steel has set off a rapid bailout by investors.  The whole sector has lost litterally BILLIONS of dollars since May's Peak.   The stocks sell off in spite of their earnings reports.

But, they all seem to have killer dividend payments at now very attractive yields.
There are also acquisitons, spin-offs, and so on in this sector in the near future as well.

SID (is looking to sell off NAMISA)
AKS  (AK Steel is seeking a buyer)

And MTL is intriguing because it used to go for $60 a share until Vladimir Putin spoke 5 sentences.  Now it's $23 a share.  

Given the Russian - Georgian War....  I see MTL as probably the biggest bargain priced deal in the sector right now.  Given all the steel that's needed for Russia's tanks, jets, etc.

1 Comments – Post Your Own

#1) On August 11, 2008 at 3:45 PM, DemonDoug (55.37) wrote:

I think steel will be okay once china starts re-ramping up production after the olympics, but these companies all had huge percentage gains in the past 5 years, I think they still may be overvalued a bit, I wouldn't touch X or NUE, i forget the ticker for arcelormittal but that's the one i'd like above the rest.

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