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Cheap Stocks to Buy Now: AK Steel (AKS)


Market Cap: $880 million
Industry: Materials

AK Steel (AKS) produces steel for use in industrial and electrical applications.

This stock was gutted by a one-two punch of the commodity crash of 2008 and the Great Recession in the wake of the financial crisis, with its price plummeting from over $70 a share to a low of around $6 in about nine months. But after bottoming at less than $3 a share last year, prices have more than doubled to current levels.

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 finally return to profitability in 2014 as a result.

There is undoubtedly risk here, since AK Steel is a cyclical stock that does best amid strong industrial and manufacturing demand; Case in point, a lot of strength in AKS stock recently has come from a resurgent auto sector and increased demand for a steel as a result.

Thus, a rollback in demand could result in a rollback in AKS … but if you believe that the worst is behind us, this materials stock will give you a good foothold in the resurgence of global manufacturing in the years ahead.

Article printed from InvestorPlace Media,

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