June 16, 2021
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This story originally appeared on StockMarket
Are These the Best Steel Stocks to Invest In This Week?
When the economy picks up again, demand for construction metals and materials would follow. Because of this, steel stocks are making headlines in the stock market today. It would indeed be as countries that are dealing well with the pandemic plan to return to normal. Back in April, President Joe Biden proposed a massive $ 2.3 trillion plan to aid infrastructure and economic recovery efforts. While many industries would benefit, steel would be a common factor. Given the importance of steel in myriad industries, investors could now be looking for the best steel stocks to buy.
To understand this better, we could take a closer look at what exactly President Biden’s proposed plan covers. The highlighted key sectors include transport infrastructure, which also includes the development of electric vehicles (EV). If the law is passed, a whopping $ 621 billion would be invested in this sector. Since steel is a core component of many manufacturing processes here, steel prices would have more leeway to rise. In fact, according to S&P Global Platts measurements, steel prices have already risen 60% since the beginning of the year. Because of this, steel stocks might be a viable game for investors right now.
Obviously we can see that steel companies continue to thrive as demand drives up the price of the commodity. Steel makers like ArcelorMittal (NYSE: MT) and Schnitzer Steel (NASDAQ: SCHN) would now be notable examples. Both companies are responsible for processing raw materials to ultimately produce steel that enables numerous industries in our world today. Now both the MT share and the SCHN share have risen by over 165% in the past year. With that in mind, here are three top steel stocks that you should know about in the stock market now.
Top steel stocks to buy [Or Sell] In June
Cleveland-Cliff is an Ohio-based company specializing in iron ore mining, processing, pelleting and steelmaking. In fact, it is one of the largest flat steel producers in North America. The company is vertically integrated into steel production and extracts the raw materials for primary steel production and downstream processing, punching and tool manufacture. Cleveland-Cliff is also one of the largest steel suppliers to the US automotive industry. CLF stock is currently trading at $ 22.88 at 10:40 a.m. ET and is up over 200% over the past year.
On Tuesday, the company announced that it had raised its financial guidance for the second quarter and full year of 2021. Specifically, the forecast is for EBITDA of $ 1.3 billion for the second quarter of 2021 and an adjusted EBITDA of $ 5 billion for the full year 2021. Last week, the company also celebrated its first six months of continued operations and production of hot briquette iron (HBI) at the company’s state-of-the-art direct reduction facility in Toledo, Ohio.
In April, Cleveland-Cliff also released its financial results for the first quarter of 2021, in which the company posted net income of $ 41 million, or $ 0.07 per diluted share. Mr. Goncalves added: âAs the year goes on, it will become clear that the pricing environment we are in – and will continue to benefit from – is not a result of luck. Our expectation of $ 4 billion in adjusted EBITDA for the full year is based on conservative pricing expectations compared to today’s prices and the current forward curve. This will allow us to generate record levels of free cash flow and pay off a significant amount of debt so that we can reach less than 1x debt by the end of the year. âFor these reasons, consider adding CLF stock to buy?
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United States Steel Corporation
United States Steel Corporation (US Steel) is an integrated steel manufacturer. In particular, the company is investing in expanding its capabilities in both integrated and mini-mill steelmaking technologies. The company is a Fortune 250 company and prides itself on innovation. Its high quality steel products are used in the automotive, construction, energy and packaging industries. X stock currently trades at $ 26.26 at 10:42 a.m. ET and is up over 150% over the past year.
The company announced last week that it had agreed to sell Transtar to Fortress Transportation and Infrastructure Investors for $ 640 million. Upon completion of the sale in the third quarter of 2021, US Steel will see important strategic benefits from the transaction. This would include a further alignment of the company’s operational focus on the core business of mining and steelmaking as part of its best for all strategy. It will also strengthen its balance sheet, which includes deleveraging.
In April, the company also announced its financial results for the first quarter. US Steel posted net earnings of $ 91 million, or $ 0.35 per diluted share, for the quarter. It also ended the quarter with $ 753 million in cash. The company believes the strength of its business is bullish as it released strong financial results for the first quarter. Given this news, are you considering adding X shares to your portfolio?
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Next, we’ll look at TimkenSteel Corporation. In short, the Ohio-based company makes high-performance products from carbon and alloy steel. It mainly supplies the automotive and energy industries, as well as other industrial end markets, among others. In particular, TimkenSteel is a leading manufacturer of alloy steel bars, seamless mechanical tubes and precision steel components.
With over a century of experience, the company is no newcomer to the industry. For the sake of size, it had sales of $ 831 million in 2020. Now, TMST stock is currently trading at $ 14.25 as of 10:42 a.m. ET. Given the current focus on steel, could the company’s stocks be worth a look?
Well, for one thing, the company seems to be operating at full speed. We can see this from the excellent first quarter earnings report released last month. TimkenSteel was able to increase its net profit by 149% year-on-year. This was followed by a 145% increase in earnings per share over the same period. CEO Mike Williams identified well-coordinated efforts by the TimkenSteel team to improve manufacturing efficiency and utilization throughout the quarter as key drivers of growth. With the automotive and industrial sectors in full swing, would TMST share overall be a top buy for you now?