POSCO (ADR) (NYSE:PKX)

Low PE, favorable environment with potential in China, Japan, and SK. NK, is a remote possibility for customer base should they decide to move into the present century.

Buying because

- Good P/E, very good ROIC = 13%, undervalued P/S=0.8 and low institutional holding of 11.8%.
- Very good balance sheet compared to the industry peers (NUE, STLD, MT).
- Buffet is long on the stock. Nice to know.
- Invested in China, India, Japan. Should see revenue increase in Japan rebuilding.

Expect to see the stock propelled by growing demand, primarily from Asia (China, Japan as it rebuilds and India - new plant sanctioned by the Govt.)

Long Watchlist

great one

PKX is a stock I found several years ago. I didn't have the money to pull the trigger, so I had to watch the stock shoot up from a bystander's point of view. Since they had moved to what I considered nose-bleed valuation, they fell off my radar. Fast forward to Spring 2011. Seeing the scope of the disaster in Japan, it seemed to me that rebuilding will require a massive amount of steel. This will make a strong commodity even stronger. I decided to take another look at Posco, and found the stock has returned to a much more logical valuation. I'm giving this an outperform on CAPS, and will be buying with real life money in the near future.

To paraphrase a research report from my brokerage firm: damaged Japanese ports will shift Japanese steel production (8% of world market) from Japan to South Korea, Taiwan and China.

Posco seems like a winner to me.

Asian steel producer should be busy in the near future. Forward P/E of 11. Stock hit again today. good entry here

One of the best-run steel companies in the world. Located in economic growth area (South Korea). Stock prize volatile because of political tensions on peninsula. Dips offer good entry for investors.
Should thrive when steel market gets stronger.

#1 steel company in the world

This Koren situation is exactly the kind of news that you need to build a large position in this company. They are going to suffer significantly in the short term, but overall, they are going to OP. It's too i jumped in a little early.

Asia growth story

Buffett bet.

On 9-2-2010 @ $102/share: Market Cap = 31.5B; P/E=9.8; P/B=2.08; P/E*P/B=20.38 (Barely value); Current =2.90 (healthy!) ; LT Debt to Eq = 0.16 (almost nil); ROE (TTM) = 23.07; ROA (TTM) = 12.0; ROA (5 years) = 9.8 ; Div = 1%. In the last five years PKX has traded in a range of $40 to $190. I would be VERY INTERESTED in getting in below $80. Starting @ $78.

Growth and Value Screen.

I like PKX as an international play in raw materials. Very well managed company, with good free cash flow and a fairly healthy balance sheet. They will outperform when the overall economy rebounds.

POSCO is one of the most efficient steel manufacturers in the world, especially in higher end products like stainless steel. Added to this, its geographic location and future expansion plans allow for continued growth for many years to come. With 12.5% free cash flows to equity, over the full cycle, and double digit growth prospects, POSCO's returns look good from its current price of around $93.

The company makes hot- and cold-rolled steel products (plate steel, stainless steel, electrical steel, and wire rods), which it sells to the auto and shipbuilding industries. It produces more than 30 million tons of steel a year, making it the world's #3 steelmaker behind the combined ArcelorMittal and Nippon Steel. Subsidiaries include POSCO Engineering & Construction (which builds steel plants, steel-related infrastructure, and energy facilities) and POSDATA (systems integration). The South Korean government privatized its stake in POSCO in 2001, ending the company's 30-year steelmaking monopoly. Return on equity $16.87. One year EPS growth 32.63%. Very profitable company with significant upside. Stock should outperform the market.

book value <1. ROE 23%