"Steel is steel". except for the fact that it isn't. Compare an integrated producer like POSCO
In the case of Chaparral, structural steel products are the name of the game. Instead of producing sheets of steel for Ford's
With demand (and pricing) of steel jumping all over the place, to say nothing of the cost of inputs like scrap metal and electricity/natural gas, earnings performance continues to be volatile. Revenue this quarter was up nearly 28% over last year and up about 8% from the last quarter, while operating income rose about 180% and 15%, respectively, over those time periods.
If we really are seeing a revival in non-residential construction (something I've been talking about for at least a year now), Chaparral isn't the only way to play it. Companies like Lamson& Sessions
For this Fool, Chaparral is another reminder of the virtues of keeping a little dry powder on hand in the form of extra cash to invest. I would have loved to have snapped up these shares about a month or so ago, but I didn't want to sell a holding to pay for it. Now, though, the stock has recovered and isn't enough of a bargain to really entice me. Nevertheless, with the way these stocks are trading nowadays, another second chance may be only a week or two away.
For more metal-minded missives:
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).