Why Schnitzer Steel Industries' Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Schnitzer Steel Industries (Nasdaq: SCHN  ) are down 20% today as the company gave a disappointing market outlook after the market closed yesterday.

So what: Management said it saw volumes falling in its steel manufacturing business and ferrous volumes unchanged from the second quarter. Higher costs for raw materials and freight will compress margins and put pressure on earnings as the economy struggles to recover.

Now what: Shares have been crushed over the past year, and today they crashed through the previous 52-week low. But the stock now has a 2.3% dividend yield and trades at 8.4 time trailing earnings. Estimates have fallen hard, but the company is still expected to be highly profitable this year, and it has beaten earnings estimates the past three quarters. I'd like to see the stock settle down from its current tanking before buying, but it's beginning to look like a decent value, even in a weak market.

Interested in more info on Schnitzer Steel Industries? Add it to your Watchlist.

Fool contributor Travis Hoium has no position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.

Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1890203, ~/Articles/ArticleHandler.aspx, 9/17/2014 6:06:57 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 17,156.85 24.88 0.15%
S&P 500 2,001.57 2.59 0.13%
NASD 4,562.19 9.43 0.21%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/17/2014 3:59 PM
SCHN $25.76 Up +0.56 +2.22%
Schnitzer Steel In… CAPS Rating: ****

Advertisement