A few years ago, I bought lots of Steel stock X at 23. It quickly went to 15, yes, same old #$%$, lower price imports, pension liability..etc. then it started to movie up for no reason, I got out at 25 if my memories serve me. Then I watched X with mouth wide open, and hitting my head with a hammer when it went to 47 and change. Then slowly and surely, it came down slowly , and then quickly to 5 ( five ) bucks and change. Then it bounced back to 20, and it is trading now at 15. ABX can move higher, and lower just like X.
They are going to make 56 cents this year, and 74 cents next year, and ABX's book value, yes, all their gold underground, tractors, mining equipments..etc included is 6 bucks. ABX's PE is higher than FB's base on next year's projected earnings. Give me a break! " increasing cash flow, and focus on core business ", they were doing that last year, and this year when the stock is under 6 buck.
These guys are alway wrong: remember they said Gold is going to be 1,500.00 by mid year, and 1,000.00 by Fall? Now, they are saying Gold is attractive. When ABX was at 6, they say avoid the pig like Black Death, they have too much debt, lots more write off coming in South America's money hole...etc, Now, ABX would be at 23 soon, and that was las week, now, 23 is no good, 27 is more like it. There got to be a law against these guys.
There is a divergence in the four horseman: Gold, Silver, Platinum, and Palladium. Only gold shines; Platinum is at 900 and change, Silver is at 15, and Palladium is at 500 and change. All the best!
Shares of US Steel (NYSE: X) and others in the steel sector are stronger Wednesday following positive comments Morgan Stanley analyst Evan Kurtz, who sees a paradigm shift in the industry and, as a result, upgraded the sector to Attractive and raised company price targets by an average of 40%.
The firm's top picks in the sector are Overweight-rated US Steel and Steel Dynamics (NASDAQ: STLD). Kurtz raised his price target on US Steel from $35 to $60 and his Steel Dynamics price target from $21 to $28. Meanwhile, he raised his price target on Equalweight-rated AK Steel (NYSE: AKS) from $5 to $10 and Nucor Corp. (NYSE: NUE) from $58 to $62. Underweight-rated Schnitzer Steel Industries, Inc. (NASDAQ: SCHN) had its target cut from $28 to $25.
Kurtz sees a runway to mid-cycle. "We believe the era of significant mini-price cycles in the US is ending and the steel market is approaching healthier mid-cycle conditions. Utilization has just reached ~80%, with more upside to the ~85% typical at mid-cycle."
On the paradigm shift, Kurtz said, "Mini-cycles stemmed from poor pricing discipline, import order patterns, lean inventories, and short lead times. We believe the impact from the first two will be muted by consolidation and new trade restrictions. Improved supply-demand will alter the inventory and lead time environment. We expect these changes to lead to higher operating rates, less volatile pricing, and better fixed cost absorption. On average, our price target moves factor in a 15% improvement in mid-cycle EBITDA and a 6% increase in mid-cycle multiples."
Five factors cited for the industry upgrade were:
1) Further consolidation
2) A return of capacity utilization to the 80%+ range
3) New import duties and potential for further cases
4) Improving underlying demand
5) A structural increase in service center inventories
Elaborating on industry consolidation, he notes there have been two major M&A transactions that materially increased market share concentration among flat-rolled mills. ArcelorMittal and Nippon Steel & Sumitomo Metal acquired ThyssenKrupp Alabama, while AK Steel and Steel Dynamics each acquired one of Severstal North America’s two mills. They expect consolidation to continue, with Gallatin Steel reportedly up for sale according to Steel Market Update. The analyst views consolidation as healthy for the steel industry and sees Gallatin being a strong match for either Steel Dynamics (regional fit) or US Steel (head start on EAF strategy). The analyst likens steel industry consolidation as similar in nature to the recent transformation of the airline industry.
Overweight price target of $60.00 (from $35.00)
For an analyst ratings summary and ratings history on US Steel click here. For more ratings news on US Steel click here.
Shares of US Steel closed at $38.14 yesterday.
Schwab covered my stock short position ( calls assigned ) without even calling me; they can's find any shares to short even at 11% interest charges. I think I am going to go long at 16.5 and below. Looks like CLF will maintain their 4% dividend yield, and bankruptcy is not here yet.
The option market tells the story. There are little interest anywhere in August, with puts open interest and volume outpacing the calls. Trading range 18 to 15.5 for the nest three months. The directors/CEO BS is just a red herring.
I agree! This unhealthy spike meant a little short covering, and nothing more. I am not sure this dog would retreat to the teens, but retest of 22.5 is possible when the general market corrects. NUE, and STLD shows a lot less reaction, and NUE can't even finish in the black.
I always look at FCX; this dog has the biggest capitalization and it missed the big rally this week. GG is way too expensive, and there is no justification for this move. That said, what do I know?
I agree, last time it rallies to 27.75 on Sep 6, 2013, but this time the pull back could be smaller, 23-24 is reasonable; way overdone this time with this crazy week.
X is supposed to earn 1.78 this year, and 2.30 next, but so what? Give this dog a 10X PE: 18 price target this year and 23 in 2015. There are better stocks somewhere else.
..going lower. It is acting just like last year this time, straight down till June. House of pain till October 2014. Fduck you: Zack, and Seeking Alfa..etc.