Some stocks are tough to own, through no particular fault of the company behind them. They might be in volatile industries, or in commodity industries with little to no pricing power, or both. That's SchnitzerSteel's (NASDAQ:SCHN) current position -- the market for scrap metal swings around (pretty dramatically at times), and there really isn't any way to develop a "brand" in that industry. Still, there's money to be made there, and Schnitzer just may have the right idea on how to go about building a company that investors can stick with for a period of years.

This quarter highlights the good news/bad news nature of this business. Reported revenue growth of 108% seems great . until you read the rest of the income statement. Operating income fell from last year (though comparisons are affected by since-dissolved joint ventures), and adjusted net income was basically flat. It's kinda hard, then, to get all revved up about doubling revenue when none of that made it through to the bottom line.

Still, there were positive signs on a segment basis. Operating income was up about 22% in the recycling business, while revenue there was up more than 100%, and processing volumes were much higher. Likewise, the steel business made a good showing for itself, and pricing is looking OK. The auto-parts business had a tougher go of it, with lower same-store sales and flat operating income, but the company is still integrating and transitioning acquired facilities here.

On some level, it's hard for me not to like recyclers and processors such as Schnitzer, Metal Management (NASDAQ:MTLM), and Commercial Metals (NYSE:CMC) -- particularly since I like the prospects for mini-mill operators such as Nucor (NYSE:NUE) and Steel Dynamics (NASDAQ:STLD), and scrap is one of their main ingredients. I also like that Schnitzer is at least saying the right things -- reaffirming that it's tough to achieve real long-term success in this business without being the low-cost operator.

All the same, these are tricky stocks to recommend if you don't already have some firm convictions and personal knowledge of the industry. At least companies like Rio Tinto or CVRD have their mines to fall back on, whereas Schnitzer and the like must go find their scrap. I won't dismiss Schnitzer's low-cost drive and three-way diversification, but I think there are easier ways to make money in the stock market.

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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).