Zacks Investment Research upgraded POSCO ( PKX - Analyst Report ) to a Zacks Rank #1 (Strong Buy) on Feb 12, 2013.

Why the Upgrade?

Posco is the world’s third largest steelmaker on the basis of output and currently has a market capitalization of approximately $25 billion. Long-term prospects are compelling for this Korean steelmaker, making it an attractive investment option.

Global steel demand is likely to grow by 3% year over year in 2013; being largely pushed by restocking activities in China and strong demand from the U.S, India and Southeast Asian countries.

To leverage from the growing demand, the company has been expanding its operations in the domestic market as well as in the international arena, especially the fast growing and emerging markets worldwide. Moreover, higher proportion of value-added products like cold-rolled steel, automotive steel plates and electric steel sheets in its product mix will work in favor of the company.

In 2012, crude steel production was at its highest level at 37.986 million tons and represented a 1.8% increase over 2011. Finished product sales were up 1.6%; export ratio of finished product sales was at 41.7% versus 38.6% in 2011. Demand for finished products was strong from the Automobile end-market while weaknesses were noticed in Home Appliances and Shipbuilding markets.

For 2013, management expects consolidated revenue to be approximately KRW 66 trillion. Finished product sales are estimated to be roughly 34 million tons; crude steel production about 37 million tons while consolidated investments are likely to be approximately KRW 7 to 8 trillion.

Other Stocks to Consider

Other stocks to watch out for are Companhia Siderurgica Nacional ( SID - Analyst Report ) , with a Zacks Rank #1 (Strong Buy) and Gibraltar Industries, Inc. ( ROCK - Analyst Report ) and Commercial Metals Company ( CMC - Snapshot Report ) , both with a Zacks Rank #2 (Buy).