Despite my inclination to believe that apocalypse is upon the steel industry, it doesn't mean that investors can't still find opportunities to invest there. On the heels of a tremendous run-up in 2004 and the beginning of 2005, many steel companies sport sky-high valuations in comparison to their industry, even after the haircut they received over the past month or so.

For example, AK Steel (NYSE:AKS) trades at a multiple to earnings of 34, Gibraltar Industries (NASDAQ:ROCK) has a P/E of 11, and Allegheny Technologies (NYSE:ATI) wears a whopper of a multiple at 169. The industry itself sports a price-to-earnings ratio of just 6. While these companies have been bid up to such lofty levels because of their performance over the past year, it means they can't afford a stumble going forward. And with few offering any positive free cash flow-generating capabilities at all, it will require investors to be more selective in their picks.

Nucor (NYSE:NUE) is an example of a company that might just be an attractive investment. The company features a multiple of 7, which exceeds that of its average P/E last year, and it is actually trading at about half of its 10-year average multiple. In addition, its enterprise value-to-free cash flow ratio of 11 makes it look value-priced. Nucor is the biggest steel producer in the United States, and its profits have surged along with its industry, but it has also been making some smart acquisitions over the past year to enhance the segments in which it is strongest.

Last year, the company bought some assets from competitor Worthington Industries (NYSE:WOR) for $82 million, following a purchase of Corus Tuscaloosa for $90 million. Last week, it took a 12% stake in tiny CAP Technologies, a metals cleaner, and may ultimately up its ownership to 25%. And just yesterday, in one of the biggest acquisitions it has made, Nucor announced that it was buying Marion Steel for $113 million. The Marion purchase is important because the steel mill, with an annual capacity of 400,000 tons, is in close proximity to 60% of the steel consumption in the United States. The acquisition is expected to be immediately accretive to earnings.

While consolidating aspects of the industry under its aegis may be good for its future profitability -- profits grew 1600% last year -- Nucor must also be careful to not pay too much for the companies it is buying as they are also enjoying increased profits and higher price tags. With analysts expecting Nucor's earnings to fall about 30% in 2005, other companies might experience similar declines and could become even more attractively priced.

Nucor is an industry leader with smart leadership making intelligent acquisitions, and it happens to be trading at a price some 20% off its 52-week highs. The government's decision to extend some ill-advised anti-dumping duties on foreign steel manufacturers -- policies Nucor obviously supports -- may create an environment for the company to continue earning handsome profits. It may also avoid the stampede of the Four Horsemen of the Apocalypse and reward investors accordingly.

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Fool contributor Rich Duprey does not own any of the stocks mentioned in the article.