Cheap Stocks to Buy Now – AK Steel (AKS)
Price as of 8/14/14: $9.79
AK Steel (AKS) is a boring materials stock that does just what you think it does — produces steel, for use in industrial and electrical applications.
Commodity stocks have certainly taken it on the chin in recent years, thanks to the one-two punch of the commodity crash of 2008 depressing prices and the Great Recession and emerging-market slowdown sapping demand.
But after bottoming at less than $3 a share last year, prices have more than tripled to current levels and there is a decided tailwind behind this stock despite its single-digit share price.
The worst of the commodity crash seems to be over, with stable pricing for materials and most materials stocks right-sized for weaker demand out of China and the West. AK Steel is forecast to nearly break even in fiscal 2014 and return to a decent profit in 2014 as a result.
Investors are starting to see the value here, since even after a 17% run year-to-date AKS stock trades for just eight times fiscal 2015 earnings.
There is undoubtedly risk here, since AK Steel is a cyclical stock that does best amid strong industrial and manufacturing demand. But if you believe the worst is behind us, this materials stock will give you a good foothold in the resurgence of global manufacturing in the years ahead.