Commercial Metals Company (CMC)

specbear

The metals market is currently ruled by China and nobody really wants them to win.

23,4 US$ 14 Nov 2009

PERSONALIZED FOOLISH PICK OF THE DAY - METAL

Mmm...recycling metal...

I invest in macrotrends I see coming.
Metal recycling is one of them.

Basic Materials will rebound from financial and bank blunders. I have been to CMC Plants -- Very nice steel making equipment. Volatile during this massive armegeddon -- but a good steel maker, including rebar.

Essentially just another metal maker that I believe will outperform others in the space. I see steel, concreate and other industrials leading us on the way out of this and am thus searching the space for those I believe are positioned to do well.

Listen to the report that will come out next week (3-24-09) and I bet you'll be glad you sold your CMC. Bad news for several more months, maybe rest of 09.

Sell now before they release goodwill impairment charge for 4th qtr 08. Good company but short term is gonna be ugly! Long term??? I'd say get out now & get back in about 6-12 months or so.

My father was with this company for over 30 yrs. in the recycling div. He said they are strong like bull. And if they sell there recycling div. they will bank even more. This international co. has mills world wide and is poised to brake out again within the year. Insiders are have been buying each month and I plan to take on more if it dips below 10 again. With the recent price drop in metals a I would bet they are letting there many recycling yards pile up once again and as soon as the us and china crank back up ooooyaaa.

12/17/2008 Bottom has fallen out of recycling. But this company's stock hasn't yet been properly adjusted.

With the new emphasis on green energy it follows that recycling will continue to make more and more sense. The companies poised to recycle metal and reusable products should ride the wave of the new interest.

Steel will not go out of style in the foreseeable future. It's used in everything, it's relatively cheap, and it's strong.

Another aspect of the company is that it is environmentally friendly. This trend has and will continue to grow. With a democratic president in charge, the growth is even more certain.

And like AKS, this company is poised to take position. I can see Obama rolling out New Deal-esque infrastructure expansion/renovation plans, and metals will be in great demand in order to feed the construction efforts.

Commercial Metals Co. (CMC)

Trading as I am writing this at about $10.40 per share. P/E of 5.3. Annual dividend of $0.48 or 3.90%. Last 12 month earnings of $1.97 so the dividend is well covered and management has a history of increasing dividends over time.

Stock has really been beaten down this year. 52 week range of $8.44 to $39.80. Last quarter reported record profits.

You can buy the stock for the dividend and sit back and wait. I believe the stock will work its way back to the 39 range over two to three years as the recession ends so there is a big upside potential. From here, not much downside. If one believes the stock is going sideways from here for a while, you can also sell covered calls against it to generate additional income. If you do that, I would always sell the near term options.

Because recycling will never be out of vogue. The future depends on it, and it is cheaper and cleaner to recycle metals than to keep raping the earth for virgin products

Value. Low PE, low debt, good yield, trading below book.

Unwinding of supply, as uranium prices continue to collapse this will be one of the companies killed by this as well as CCJ

I like this stock going into the future, with accelerated international metal demands.