Just a few weeks ago the shares in US steel makers was trading at or above their highest point since the beginning of the year. United States Steel Corp. (NYSE: X), Nucor Corp. (NYSE: NUE), and AK Steel Holding Corp. (NYSE: AKS) were anywhere from 10% to nearly 90% above their year ago share prices. Even aluminum maker Alcoa, Inc. (NYSE: AA) set a new 52-week high.
Since then, however, the shares have wavered around somewhat, but the best any of them could manage was to stay flat. Both Alcoa and AK Steel are off more than 20% since the beginning of the year.
There are a number of reasons for that. First is the jump in seaborne iron ore prices, which don’t affect US steel makers much because they source most of their iron ore from domestic US sources. Mills are operating at higher capacity levels, anticipating a growing demand for steel in the second quarter and for the rest of the year. The federal stimulus package has had little positive effect on steel makers that are still suffering from the effects of sluggish construction in both the commercial and residential markets.
Aluminum has suffered from oversupply and low pricing. Supplies are high world-wide, and the global financial crisis tamped down prices for aluminum by about 35%. Alcoa shares dropped nearly 9% last week alone.
While these shiny metals players have predicted at least a modest uptick in the second quarter, not all signs are positive.
US Steel’s 52-week trading range is $25.96-$70.95 and the stock is trading at around $53.50 this afternoon. The mean target price for the shares is $67.91 and the company’s forward PE is 8.65.
Nucor shares are trading at about $46 this afternoon, at the high end of the 52-week range of $38.27-$51.08. The mean target price for the stock is $50.75 and the forward PE ratio is 12.22.
AK Steel is trading at about $15.75 this afternoon, well off the high end of its 52-week range of $10.62-$26.75. The mean target price for AK Steel is $21.29 and the forward PE is 8.08.
Alcoa is down more than 3% today, trading around $12, near the low end of the 52-week trading range of $8.33-$17.60. Mean target price for the shares is $16.82 and the forward PE is 11.37.
No one is figuring these stocks to bust the top of their current trading ranges. The rest of this year looks pretty weak, especially for the steel makers. None of the four is expected to show a full year EPS profit, and there’s not even any good rumor to start a buying spree. It looks like a dull year for the shiny metal guys.
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