POSCO (ADR) (NYSE:PKX)

CAPS Rating: 4 out of 5

The Company manufactures and sells a line of steel products, including hot rolled and cold rolled products, plates, wire rods, silicon steel sheets and stainless steel products.

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Player Avatar defridgerator (26.43) Submitted: 7/14/2013 1:07:50 AM : Underperform Start Price: $69.90 PKX Score: -4.05

The past 5 days, PKX has gained 6%, though if you look at it over the past month, it's share price has fallen .3%. While not significant, that is stagnation. On May 27th, 2013, there was an article that exposed the company's human right's violations. That week, the stock price dropped from $71 to $65, and remained that way until July 11th, where it closed at $69.45. So what changed between July 10th and July 11th? Good question.

There were 3 Reports generated on July 11th, 2 by Ford Investor Services, and one by ValuEngine Inc. (as listed on yahoo finance). I don't have access to these reports (the two combined Ford costs $45, and the ValueEngine Inc costs $195.50), but feel free to check it out if you're serious about this company. On July 12th, Reuters Investment Profile published a 12 page analysis and 3 year interim financials ($138).

So my best guess is that companies attached with Ford have invested millions of dollars into this steel company. What does that tell you about Ford? Is it just business? Does ethics not come into play at all?

It is the 3rd largest steel company in the world, and if it's share price gets undervalued due to ethical human rights concerns, then perhaps Ford / other investors are right in snatching up this undervalued company. To be fair, I'm not sure what is written in the Ford Investment Services report, nor what's in the ValuEngine Inc report.

However, I do find it very odd to see this share price fall steadily from May 27th to July 11th. Then jump up very near it's pre-bad-news price. Will the price continue to go up, or is the past 5 days just an inflated price?

Will new management change their accused human rights violations? Does the company even care that they could be removed from the Dow Jones Index due to their business practices?

As reported on July 9th in the business wire, POSCO and its subsidiaries have been evicting and displacing people from their homes in order to increase the bottom line. Such as the violations in Odisha, India in 2005 between POSCO and the government of Orissa(became Odisha in 2011). They only learned to sweep future infractions under the rug. Uzbekistan is home to POSCO and it's subsidiary, Daewoo International. They operate 3 cotton companies that violate both forced labour and child labour and have acknowledged their violations and lack of reform to the UN Global Compact and the Guidelines for Multinational Enterprises of the Organization for Economic Cooperation and Development. In Iran, they operate indirectly with the Iranian government due to Iran's complex privatization policies.

So why would Ford/ other companies seek to align themselves with a business that profits off of human misery? Your guess is as good as mine.

My sources:
http://sogotrade2.websol.barchart.com/?module=stockDetail&storyID=10665364&selected=news&symbol=PKX
http://finance.yahoo.com/q?s=PKX
http://sogotrade2.websol.barchart.com/?module=stockDetail&symbol=PKX&region=US&1_selected=stockNews

Member Avatar defridgerator (26.43) Submitted: 7/18/2013 4:20:02 AM
Recs: 0

--POSCO has decided to pull out of India due to delays in acquiring permits for its $5.3B factories.
http://www.bbc.co.uk/news/business-23338675

--MT is also scrapping their projects in Orissa, also due to delays in permits.
http://online.wsj.com/article/SB10001424127887324448104578611691330921694.html

Maybe the stock is continuing to go up, and while I'm not exactly sure why, I'm not going to invest in this company.

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