Nucor Corporation (NYSE:NUE) — This is the largest mini mill steelmaker in the United States and also has one of the most diverse product lines.
S&P Capital IQ recently raised its opinion on NUE stock to a “strong buy.” This was based in part on analysts’ opinion that Nucor’s new Louisiana plant will result in less volatile production costs and improve the company’s low-cost position in the U.S. steel industry. Capital IQ also lauds Nucor’s strong balance sheet and cash flow.
Its analysts forecast revenue will rise 4.9% in 2015 and 0.9% in 2016, helped by growth in non-residential construction spending, which is expected to increase 7.1% this year and another 5.8% in 2016. On the earnings front, they anticipate a 43% jump to $3.17 per share in 2015 and another 22% increase to $3.87 in 2016.
NUE stock topped at $58.76 on Sept. 17. Its low was made on Jan. 29, at $42.93, following a buy signal from my proprietary indicator, the Collins-Bollinger Reversal (CBR), several days before.
Since the beginning of February, NUE stock has been consolidating in a saucer formation, a powerful bottom signal. Support rests at the bottom of the saucer at about $46.50 and the 50-day moving average at $47.47.
Buy NUE stock at the market price in anticipation of a break through its downtrend line and triple-top at $49.27, and a close above its 200-day moving average at $50.38. The trading target is $54, which would result in a 14% gain.
Investors may wish to purchase NUE stock as a key holding in the U.S. steel industry and potentially much higher reward. The company pays a dividend of $1.49 per share for a forward annual yield of 3.1%.
