Wall Street money managers (and their algorithms), considering the effects of Nippon Steel’s acquisition of U. S. Steel, a $14 billion transaction, are buying other steel stocks.
The idea that interest rates may be coming down soon is also stimulating the steel industry to such an extent that many stocks in the group are hitting new 52-week highs.
It’s a powerful combination of factors.
Here’s how the benchmark Van Eck Select Sector Steel exchange traded fund now looks on the daily price chart:
This fund has 26 holdings and generally tracks the NYSE Arca Steel Index. The ETF jumped higher last week after Fed Chair Jerome Powell made what seemed to be positive comments about the possibility of rate cuts.
The gap up – a break-out up into a higher range – takes the price chart back into the “overbought” area as measured by the relative strength index (RSI, below the price chart).
4 Steel Stocks With New Highs.
Algoma Steel Group is Nasdaq-traded with corporate headquarters in Sault St. Marie, Ontario, Canada and a market capitalization of $995 million. The company manufactures and sells hot and cold rolled steel products including sheet and plate. It’s trading with a price-earnings ratio of 47 and at a 20% discount to book. Algoma pays a 2.17% dividend.
Compania Siderugica Nacional is New York Stock Exchange-listed and based in Sao Paulo, Brazil. In business since 1941, the company offers flat steel, long steel, steel cutting services, iron ore and related materials. Market capitalization comes to $4.97 billion. Investors are receiving a 14% dividend. Earnings this year are off by 125%. The past 5 years shows EPS growth of 148%.
Olympic Steel is Nasdaq-traded and has a market capitalization of $711 million. They’re headquartered in the Cleveland, Ohio suburb of Highland Hills. Founded in 1941, the company is focused on the processing of flat-rolled metals, pipe and tube. Market cap is $711 million. Earnings are down this year by 56% — the past 5-year’s record is up by 36%. Olympic pays a .78% dividend.
Worthington Steel is the company that, on December 1st, separated from Worthington Industries (now known as Worthington Enterprises). According to its website, the business involves metals work in the areas of “carbon flat-roll steel processing, electrical steel lamination and tailor welding.” The stock is not yet heavily traded with the relatively low (for an NYSE-listed security) average daily volume of 527,000 shares.
States courtesy of FinViz.com.