Production picking up? Really? Actually due to low energy prices production is being cut everywhere and Nucor's customers are cutting backing with massive layoffs. The scrap on the ground right now is the high cost stuff and Nucor won't be able to take advantage of lower scrap prices for many, many quarters.
This Thursday Nucor announces earnings, should be interesting. We'll see who's right. at $47 WAY overvalued with no demand and steel prices declining. Divy won't make up for a 10% loss.
Fundamentals are deteriorating not improving. Bookings are going down and along with that earnings as well. 1st QTR analysts expected 45 cents/share and now coming in around 10 cents. Sheet steel prices are also dropping. IMO you can pick up Nucor shares around $42 or $43 in a couple of weeks. Less after that.
Double? If it happens your talking 5 to 10 years, longer for me to wait. After ER expect closer to $40. Go back and look at the last 10 earnings releases, almost all big drops even when they make guide above expectations. This time were way below.
Nucor was downgraded today. I'm sure the first quarter 10 cent earnings guidance is a big reason why.
My point is that all steel stocks are doing very poorly. Look at STLD today it should have dropped the other day went it also announced very poor guidance. The ONLY thing that moved steel stocks was that very big options play which is now closed. Take a look at the March 48 call option volume today. Lots of folks getting out!
10 cents miss vs. 35 cents expected? That's quite a big miss. With the stock at $49 it was a gift if you sold yesterday. STLD also missed big the day before but went up? IMO can buy back under 46.
The regular quarterly dividend that Nucor hasn't missed in the last 30 years or so? Its not enough for me to hold the stock if we revisit lower 40's again once guidance is issued next week.
Why would that be? Special dividends haven't been issued since 2008 when the company was making tons of money! Not making anything close to that now.
Sentiment: Strong Buy
But the stock is exploding up due to someone having bought call options? Good news I guess but scary its not going up for the right reasons. Profits! STLD also issued poor future guidance today and its stock price appreciates too! Nucor should issue guidance next week should be interesting.
Sentiment: Strong Buy
Really, steel prices are heading lower. How do you see that happening?
With steel inventories high and steel prices starting to drop I would have off on buying either for now.