Monday, April 09, 2007

Strengthen With Steel Stocks

Schnitzer Steel (SCHN) reported a monster quarter today. Revenues exceeded estimates by $100 million and eps beat estimates by 31 cents per share.

Key Takeaways from Schnitzer
  • Schnitzer gave a robust outlook for the rest of the year.
  • Nonferrous metals prices were up 30% year over year.
  • "The international markets for scrap metal are expected to be robust."
  • "Average net [steel] prices during the quarter are expected to be approximately 10% higher than the average prices obtained during the recently completed second quarter."

Solid Steel Stocks
  • Tenaris (TS)-Sells steel pipes mainly to the oil & gas industry
  • Arcelor Mittal (MT)-One of the most undervalued-forward P/E of 7, Business Week Cover Story
  • Posco (PKX)-Warren Buffet, Pricing power
  • Ryerson (RYI)-Small-cap domestic steel company ready to be bought out
  • Commercial Metals (CMC)- recycles and markets steel
Note: I am long MT


Blogger muckdog said...

I've played some steel the last few months, but you have to wonder that if GDP is slowing down and folks are fearing a recession not just here in the US but one that spreads around the world, then how will this play out in steel and materials?

4/15/2007 4:29 PM  
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10/05/2007 12:46 AM  
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