X

United States Steel Corp

Industrial/Transportation


Presented:08/04/2017
Price:$23.55
Cap:$4.15B
Current Price:$36.97
Cap:$8.32B

Presented

Date08/04/2017
Price$23.55
Market Cap$4.15B
Ent Value$5.30B
P/E Ratio147.19x
Book Value$14.60
Div Yield0.85%
Shares O/S176.03M
Ave Daily Vol19,053,986
Short Int16.48%

Current

Price$36.97
Market Cap$8.32B
United States Steel Corp. engages in the manufacturing and selling of steel products. It operates through the following segments: Flat-Rolled Products, U.S. Steel Europe, and Tubular Products. The Flat-Rolled Products segment includes managing steel plants and production facilities that manufactures steel slabs, rounds, strip mill plates, sheets, tin mill, iron ore, and coke. The U.S. Steel Europe segment offers producing and marketsing strip mill plates, spiral welded pipe, heating radiators, refractory ceramic materials. The Tubular Products segment involves in manufacturing and trading seamless and electric resistance welded steel casing and tubing. line pipe, and mechanical tubing. The company was founded in 1901 by Andrew Carnegie, John Pierpont Morgan, Charles Michael Schwab, and Elbert Henry Gary and is headquartered in Pittsburgh, PA.

Publicly traded companies mentioned herein: AK Steel Holding Corp (AKS), ArcelorMittal SA (MT), United States Steel Corp (X)

Highlights

The presenter is long shares of US Steel (X) at $23 and is broadly optimistic about the setup for the US Steel industry over the near-term. While he feels the core arguments for the bullish view are reasonably well understood, he noted that the market is still not giving X credit for the upside he sees coming for the price of hot-rolled coil (HRC) in the domestic market. Despite a solid 2Q ‘17 report, X is still down nearly 30% year-to-date, mostly due to its disastrous Q1 ‘17 results, and concerns about an expensive - and late - “asset revitalization plan”. In his opinion, the risk/ reward is favorable because X is the most levered play in the industry to HRC, and does not carry the automobile cycle risk that comes with AK Steel. If HRC increases from $570-585 per ton to $700, the stock is likely to trade back up to $35.

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