Have you looked at the price of steel stocks recently? Many of the major steel manufacturers have pulled back and are trading well below their 52 week highs of a month ago. Steel stocks had run up too far too fast and were due for a cool down. I am not saying that all of the pain is over in the steel sector but there are some steel stocks that are close to becoming value plays again. Below are three steel companies that I am watching.
1. Arcelor Mittal (MT) - The largest steel company in the world is currently trading at $40 per share. Many analysts have added Mittal Steel to their buy lists. The valuation isn't too rich but the stock isn't exactly cheap either. I own shares of Mittal Steel and would look to add more shares in the low 30's based on forward earnings.
2. US Steel (X) - I The stock has been crushed and there is a more downside ahead. Just about all of the downgrades are in on US Steel. The stock is a steal in the mid 30's.
3. AK Steel (AKS) - I have been buying shares of AK Steel at its current price. AK Steel has great pricing power on its electrical steel products. At a time when other steel companies are hemorrhaging AK Steel is holding up pretty well.