A Big Upgrade for Nucor
By
Dave Mock
June 19, 2008
|
Every day, the sun rises on Wall Street, and a plethora of professional analysts wake to issue new opinions on stocks. Here at the Fool, we use our "This Just In" column to examine some of these picks -- and the track records of the firms behind them -- so individuals can make better investing decisions.
In addition to following professional banks, anyone can use Motley Fool CAPS to monitor the collective opinions of more than 110,000 investors, many of whom demonstrate better investing insight than published analysts do.
Enough top-performing CAPS investors have turned bullish on steelmaker Nucor (NYSE: NUE) lately to upgrade it from the four-star rank it held for several months to the highest possible five stars. More than 1,000 investors have rated Nucor, with many of them offering analysis and commentary explaining the recent optimism.
Not only has escalating global demand for steel products been a boon for Nucor, the company's own ability to increase efficiency has been paying off for investors as well. Increased margins helped Nucor raise earnings expectations for its coming second quarter to $1.75 to $1.80 per share, well above the $1.14 per share earned last year. And that includes dilution from a new share offering that would put the company in a position to potentially swallow another steel player. With No. 2 miner BHP Billiton (NYSE: BHP) still trying to take down third-largest Rio Tinto (NYSE: RTP), many investors think it wise for smaller players in the steel chain to bulk up themselves.
While the soaring costs of energy and basic commodities have laid ruin to fuel-sensitive airliners such as Continental Airlines (NYSE: CAL) and United Airlines (Nasdaq: UAUA), steelmakers like Nucor and peers AK Steel and Arcelor Mittal (NYSE: MT) have had an easier time passing on the cost of raw materials. That isn't good news for heavy steel consumers such as General Motors (NYSE: GM), but combined with deft management, it’s a great model for profits for Nucor investors.
To see what the very best CAPS analysts are saying now about Nucor -- as well as other winning stocks they are picking -- head on over to CAPS and have a look. The community research and resources in CAPS are totally free, unlike analyst opinions reserved for paying clients.
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