|Bid||23.88 x 1300|
|Ask||35.79 x 2200|
|Day's Range||35.18 - 35.65|
|52 Week Range||30.97 - 42.28|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||1.09%|
|Beta (3Y Monthly)||1.32|
|Expense Ratio (net)||0.56%|
In the last month, United States Steel (NYSE:X) stock has surged 30% already-from oversold levels. Still, the stock still remains underwater, down 27% year to date. That 2019 performance pales in comparison to the 4.7% year-to-date gain in the VanEck Vectors Steel ETF (NYSEArca:SLX), which holds 27 steel and related peers of U.S. Steel stock.I believe that the X stock is still in a downtrend and correction is likely to ensue after a brief rally. Macroeconomic headwinds and worsening of credit metrics are the key factors that will keep the stock subdued.U.S. Steel, being an integrated steel producer, is sensitive to fluctuations in the macroeconomic scenario. This is the first reason to remain underweight on the stock. Business fixed investments in the United States declined by 0.4% in the third quarter of 2019. This is in comparison to an average of 0.3% increase in business fixed investment in the prior four quarters.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWith the private sector being the dynamic sector of the economy, it is clear that the slowdown has accelerated. Not surprising that the Federal Reserve has already cut interest rates three times in 2019.It is also worth noting that the global manufacturing purchasing manager index for September 2019 was 49.7. We are already in a manufacturing sector recession globally. The global services sector PMI was 51.6, but has been on a gradual decline. These are ominous signs for the global economy. * 7 Earnings Losers That Were Hit Hard This Season There are hopes that the trade war will continue to de-escalate as economic losses mount for both the United States and China. United Nations economists already warned that the trade war is a "lose-lose" situation for the world. De-escalation can provide some growth catalyst, but it's too early to expect renewed strength in the global economy. This is likely to have a negative impact on X stock. Worsening Credit Metrics for U.S. SteelWith clear signs of sustained economic weakness, I am concerned about the worsening of credit metrics. For Q3 2019, the company reported an adjusted EBITDA of $144 million as compared to an adjusted EBITDA of $526 million for the same period last year. During this comparable period, the EBITDA margin compressed by 900 basis points to 5%.The direct impact is on the company's cash flow and leverage. For financial year 2018, U.S. Steel reported operating cash flow of $938 million. Considering year-to-date 2019 numbers, the annualized cash flow is likely at $528 million.At the same time, the company's net debt increased to $2.1 billion in Q3 from $1.4 billion at the end of 2018. Further, U.S. Steel expects 2020 capital expenditures to be $950 million. With declining cash flows, it is entirely likely that debt will increase.Therefore, leverage has increased and I expect that to continue. It will translate into higher balance sheet stress in the coming quarters.I also want to point out that X stock is currently paying an annualized dividend of 20 cents. If the economic weakness persists in 2020, U.S. Steel is likely to suspend dividends. This can also result in stock re-rating on the downside. Final Thoughts on X StockAnother important reason to believe that X stock is likely to trend lower is the valuation. The stock is currently trading at a forward price earnings ratio of 60.54. If margin compression continues, the forward PE will remain expensive and makes the stock less attractive.Of course, forward valuations can change significantly when the industry recovers. However, I don't see that possibility in the coming quarters. The IMF opines that GDP growth in advanced economies will remain at 1.7% in 2020 after forecast growth of 1.7% in 2019. Therefore, 2020 can be equally challenging for U.S. Steel.Amidst all near-term concerns that will dominate the stock trend, U.S. Steel stock is worth considering in the range of $9 to $10. From a technical perspective, the stock is likely to find support at these levels. * 7 Under-the-Radar Retail Stocks to Buy Now Further, there is little doubt on the point that U.S. Steel has competitive positioning in high-margin end markets. This will help the company recover swiftly once GDP growth gains traction.I also believe that the company's investment in Big River Steel is likely to yield positive results in the long-term. Big River is a technology-oriented steel company with focus on new product development that caters to future demands from various industries. Big River Steel also boasts of the first Leadership in Energy and Environmental Design-certified (LEED) steel production facility.Overall, X stock is worth keeping on the investment radar, but the stock is not trending higher anytime soon. On the contrary, shares are likely to cool-off after a sharp near-term rally.As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Sell Before They Roll Over * 5 Beaten-Up Stocks to Buy That Could Be Saved By An Acquisition * 4 Startup Stocks Getting Smashed The post Expect More Pain Ahead for U.S. Steel Stock as Macroeconomic Headwinds Persist appeared first on InvestorPlace.
It is easy to think that the ill effects of the trade war between the U.S. and China are limited to those countries. After all, the S&P 500 fell 5.67% in May while the MSCI China Index was more than twice as bad, plunging 12.74% last month.Unfortunately for investors considering international equities and exchange-traded funds (ETFs), the White House is not limiting its tariff efforts to China. Last month, the White House boosted tariffs on $200 billion worth of Chinese goods to 25% from 10%, but that is not the end of the U.S. tariff list.Rather, the President Donald Trump Administration is targeting other countries with tariffs, including some major developing economies -- explaining in large part why the MSCI Emerging Markets Index fell 6.63% in May.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The 10 Best Stocks for 2019 -- So Far For investors looking to steer clear of tariff-related controversy, these might be some of the international ETFs to avoid over the near-term. ETFs to Avoid: iShares MSCI Mexico ETF (EWW)Expense Ratio: 0.47% per year, or $47 on a $10,000 investment.One of the primary reasons stocks plunged in the final trading session of May was news that the White House is targeting Mexico, the largest trading partner of the U.S., with a slew of fresh tariffs. That sent the iShares MSCI Mexico ETF (NYSEARCA:EWW) lower by 3.6% on volume that was more than double the daily average. That was this international ETF's worst one-day performance in six months.On a standalone basis, tariffs are usually controversial, but those aimed at Mexico are even more so. While Mexico enjoys geographic proximity to the U.S., the world's largest economy, the White House views that trading relationship as uneven. Additionally, the tariff action against Latin America's second-largest economy takes on added controversy because the Trump Administration is essentially saying these tariffs are the result of Mexico's unwillingness to help with the illegal immigration crisis.EWW is the largest dedicated Mexico fund, and there may be some near-term hope for this international ETF."Mexico's president on Saturday hinted his country could tighten migration controls to defuse U.S. President Donald Trump's threat to impose tariffs on Mexican goods, and said he expected 'good results' from talks planned in Washington next week.," according to Reuters. VanEck Vectors Gaming ETF (BJK)Expense Ratio: 0.66%With the bulk of its holdings being domestic casino operators and companies with exposure to Macau, the VanEck Vectors Gaming ETF (NYSEARCA:BJK) may not appear to be the type of international ETF that could be stymied by tariff talk. But price action suggests otherwise, as BJK tumbled nearly 11% in May.Las Vegas Sands (NYSE:LVS), Wynn Resorts (NASDAQ:WYNN) and MGM Resorts International (NYSE:MGM) are all Las Vegas-based companies, but each has a footprint in Macau, the only Chinese territory where gambling is legal. Proving that exposure to China is problematic when the country is at odds with the U.S., Las Vegas Sands and Wynn fell an average of 22.5% last month, putting the two largest U.S casino operators by market value in bear markets. * 6 Big Dividend Stocks to Buy as Yields Plunge Bottom line: If the tariff war between the world's top two economies keeps gamblers away from the tables in Macau, BJK has the makings of international ETF that is poised to languish over the near-term. Vanguard FTSE Europe ETF (VGK)Expense Ratio: 0.09%Yes, the Vanguard FTSE Europe ETF (NYSEARCA:VGK) is a cheap ETF. And yes, this international ETF performed less poorly than the S&P 500 in May. Even with those positive traits, this international ETF could be vulnerable to more near-term downside if the U.S. decides to explore a new theater in the trade war. That theater being Europe.President Trump has overtly used harsh rhetoric against some European companies. For example, he has said that automotive trade imbalances favoring Europe are threatening U.S. automakers. The president is also pushing the European Union (EU) to take more agriculture from U.S. farmers, something the EU is balking at."Countries like France and Belgium have also balked at joining talks because of the Trump administration's refusal in 2017 to sign a global pact on climate change," reports The New York Times. "And leaders of the Green coalition in the European Parliament have said they will not sign trade agreements with countries that have not ratified the climate accord."Bottom line: The EU and the U.S. could very well be the next chapter in the trade conflict, and that is likely to be bad news for developed-market international ETFs, such as VGK. iShares MSCI India ETF (INDA)Expense Ratio: 0.68%The iShares MSCI India ETF (CBOE:INDA) and other India funds were stars among international ETFs last month, as stocks in Asia's third-largest economy rallied following the reelection of Prime Minister Narendra Modi. While Indian equities look good compared to the broad emerging markets complex, there is significant trade war risk with the U.S. here.Last week, the White House removed India's special trade status, a policy that kept billions of dollars of Indian imports to the U.S. away from tariffs."I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets," President Donald Trump said in a statement issued by the White House. * 7 Bank Stocks to Leave in the Vault Today, India loses its status as a beneficiary developing country. Time will tell if that move by the U.S. hampers India ETFs. VanEck Vectors Steel ETF (SLX)Expense Ratio: 0.56%The VanEck Vectors Steel ETF (NYSEARCA:SLX) is a reverse tariff play. The U.S. steel industry was one group that actually benefited from tariffs, but in a recent sign of some willingness to make trade concessions, the White House lifted tariffs on Canadian and Mexican steel imports.While not an international ETF, SLX predictably reacted adversely to that news. The steel ETF is down almost 13% in the current quarter and resides almost 30% below its 52-week high, putting the fund deep into bear market territory. Analysts are sounding bearish tones on domestic steel stocks, including some residing in SLX.Last week, Deutsche Bank lowered its ratings on Nucor (NYSE:NUE) and Steel Dynamics (NASDAQ:STLD) to "hold" from "buy" while hitting US Steel (NYSE:X) with a "sell" rating. But SLX could be reinvigorated when Trump hits the 2020 campaign trail in earnest, assuming he again promises to protect domestic steel producers.As of this writing, Todd Shriber did not own any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 6 Retailers Including Disney Agree to Ditch On-Call Scheduling * The 10 Best Stocks for 2019 -- So Far * 7 Small-Cap ETFs to Buy Now Compare Brokers The post 5 Non-China ETFs Being Stung by Tariff Talk appeared first on InvestorPlace.
With all the talk about the tariffs the U.S. is levying against a slew of Chinese imports and vice versa, the end to steel tariffs aimed at Canadian and Mexican producers that was announced by the U.S. earlier this month is not receiving much attention. Some analysts view the removal of those tariffs as unfavorable for domestic steel producers, and the VanEck Vectors Steel ETF (NYSE: SLX) is reflecting this. President Donald Trump promised to protect U.S. steelmakers during his 2016 campaign, explaining in some part why SLX is up 69 percent over the past three years.
Fourteen months after President Donald Trump said trade wars "are easy to win," investors are still dealing with market weakness and volatility as the trade dispute between the U.S. and China ...
How Cleveland-Cliffs Is Looking after Its Q1 2019 Results(Continued from Prior Part)Realized prices for mining and pelletizingCleveland-Cliffs’ (CLF) mining and pelletizing realized revenue is influenced by customer demand for iron ore pellets.
Thanks to its plunge in late January, shares of Vale (NYSE:VALE) are up less than 1% in 2019. That certainly doesn't make it a big outperformer, particularly when the overall markets are up so much.The VanEck Vectors Steel ETF (NYSEArca:SLX), which counts VALE stock as its second-largest holding at 11.7% of its portfolio, is up 15.7% year to date.Should investors put their faith in VALE stock or are they best off in a different name?InvestorPlace - Stock Market News, Stock Advice & Trading TipsLet's look at Vale stock to determine if this is one that should be in our portfolio. Vale Balance Sheet and Cash FlowThe first thing I look at is the balance sheet. For Vale stock, it's clear that management is committed to deleveraging the balance sheet and paying down debt. With its $68.6 billion market cap, Vale has $16.03 billion in debt. That's down almost 30% from $22.4 billion in the prior year. Two years ago, the figure stood at $29.2 billion, with 2018's year-end balance down almost 50% from that figure.At the same time, the metals miner's cash flow remains strong. Over the past year, Vale has generated almost $13 billion in operating cash flow and more than $9 billion in free cash flow. The steel industry can have a hefty capex budget, so to see its free cash flow (which includes capex) so strong is encouraging. Valuing Vale StockCurrent estimates call for Vale to earn $1.86 per share this year. On May 9, we'll get Vale's first-quarter earnings results, and we'll see whether the company is on track for this figure. Worth pointing out is that Vale stock has beat on earnings estimates for at least 13 straight quarters. Given that estimates for the first quarter have fallen to just 36 cents per share from 57 cents per share 30 days ago likely means the stock clears the bar. * 5 Dividend Stocks Perfect for Retirees Why the hit? A Brazilian dam break from January has become quite the issue. Management didn't give investors a ton of details on the situation on the last conference call, but investors will expect some updates this quarter. The assumption is that -- despite estimates calling for 10.7% revenue growth to $9.53 billion this quarter -- this disaster is going cost Vale a pretty penny.It knocked about 20% of production offline, while authorities froze about $4 billion in assets to cover the potential costs.Although Vale stock is expected to grow full-year revenue 3.6% this year and earnings by more than 40%, this is an overhang that may keep Vale stock volatile. Trading Vale Stock Click to EnlargeVale stock has been a volatile one. As we mentioned, the Brumadinho dam break back in January dealt a serious blow to the stock price. Shares gapped down to uptrend support, then flushed below it in the ensuing sessions.The big issue, technically speaking, came a few days later. Vale stock rallied back to trendline support and failed on its retest. It then went on to take out its lows (which were actually 52-week lows). Unfortunately, that kind of price action is necessary to create a bottom. That doesn't mean VALE can't go lower or that this type of rebound happens every time. But we've seen similar price action in names like Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA) this year, too. * 10 S&P 500 Stocks to Weather the Earnings Storm Now, though, Vale stock has put in a series of higher lows and has reclaimed that prior trendline. With its recent bounce off this mark, Vale could gain some momentum to clear its major moving averages. If it can, a run to $14.50 is possible before it hits downtrend resistance.On the downside, below uptrend support and Vale stock will likely test its 50-day moving average. If that doesn't hold, Vale could take out its March lows, negating the higher lows trend and forcing investors to wait for shares to reset before going long again. Trendline support will then be on watch for possible resistance.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long NVDA and AAPL. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 Dividend Stocks Perfect for Retirees * 7 Reasons the Stock Market Rally Isn't Over Yet * 10 S&P 500 Stocks to Weather the Earnings Storm Compare Brokers The post Is Vale Stock a Safe Pick or One to Avoid In Dam Disaster Aftermath? appeared first on InvestorPlace.
Steel-related ETFs have rebounded along with the broader markets, but a potential supply glut could upend the recovery. Year-to-date, the VanEck Vectors Steel ETF (NYSEArca: SLX), the lone steel sector-specific ...
Q4 Earnings: Why Cleveland-Cliffs’ Upside Could Be Far from Over(Continued from Prior Part)Realized prices for mining and pelletizing Cleveland-Cliffs’ (CLF) Mining and Pelletizing (or M&P) segment’s realized revenues are influenced by
What’s in the Cards for Cleveland-Cliffs' Q4 Results?(Continued from Prior Part)Realized revenues Along with volumes, realized revenues are among the most important components that drive a commodity company’s top line. Realized prices also help
Analysts Are Turning Positive on CLF ahead of Its 2018 Results(Continued from Prior Part)Financial leverageCleveland-Cliffs (CLF) has come a long way with respect to its debt levels. Its debt spiraled due to acquisitions at the peak of the cycle.
The steel sector and related ETF broke down after Vale SA (NYSE: VALE) suspended dividends following a dam breach that left 60 dead and 292 missing in Brazil. The VanEck Vectors Steel ETF (NYSEArca: SLX), ...
Why Now Might Be a Good Time to Look Again at Cleveland Cliffs(Continued from Prior Part)Steel demand In the US steel sector, demand for steel drives US steelmakers’ (SLX) revenues. As a result, investors who are interested in Cleveland-Cliffs (CLF) will likely want to track US steel demand.