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“Steel represents the triumph of human ingenuity.” - Unknown
The steel industry is often heralded as the backbone of modern society. Its history is shrouded in mystery, with origins dating back over 4,000 years. A durable companion to humanity over time, steel has helped shape industries through vast periods of innovation.
The landscape of the steel industry continues to evolve at a rapid pace. Select winners have emerged that were able to adapt to the broader economic and societal changes; these stocks are telling us a story with their phenomenal returns.
While many commodity stocks have pulled back off their highs from last year, the bullish run for steel stocks remains well intact.
Steel ETF Powers to New Heights
History has also illustrated countless times that stock trends tend to last longer than many investors realize – particularly strong uptrends breaking out to new highs. The VanEck Vectors Steel ETF (SLX - Free Report) has outperformed since the last official U.S. recession, delivering a 245% return over this timeframe:
Image Source: StockCharts
The SLX ETF seeks to replicate the performance of the NYSE Arca Steel Index, which is intended to track the overall performance of the companies involved in the steel sector. This index has more than tripled in value from the March 2020 bottom.
The Zacks Steel – Producers industry group is outperforming the market over the past 3 months. While showing volatile returns from a longer-term perspective, this group has widely outpaced the market over the past several years as well:
Image Source: Zacks Investment Research
Despite the impressive performance, stocks within this group remain relatively undervalued:
Image Source: Zacks Investment Research
Leading Producer Soars to 52-Week High
Many investors may feel conservative about investing in a stock that is trading near a 52-week high. Rather than viewing the price level as concerning, history has shown us that a stock hitting new 52-week highs is a telling sign of strength. Only the strongest stocks that are in the most powerful uptrends print fresh yearly highs, and one steel stock is displaying that exact behavior at this very moment.
Nucor (NUE - Free Report) is a leading producer of structural steel, steel bars, steel joists, and cod finished bars in the United States. The company boasts 123 operating facilities primarily in North America. Nucor is also engaged in steel trading and the rebar distribution business. It serves the agricultural, automotive, construction, energy, infrastructure, and transportation industries.
Image Source: Zacks Investment Research
NUE makes up nearly 8% of the total SLX ETF holdings. Nucor is committed to expanding its production capabilities and growing its business through strategic acquisitions. Its efforts to boost production capacity through numerous growth projects should drive profitability, strengthening its position as a low-cost producer. The steel company is also seeing strong momentum in the non-residential construction market and heavy demand in the equipment market.
Building on the bullish theme, Nucor has established a healthy track record of exceeding earnings estimates. In its fourth-quarter results, Nucor posted earnings of $3.16/share, an 11.66% surprise over the $2.83/share consensus estimate. NUE has delivered a trailing four-quarter average earnings beat of 9.92%. Analysts have also been increasing earnings estimates across the board lately:
Image Source: Zacks Investment Research
In addition to significant share price appreciation, Nucor also pays a $2.16 (1.16%) dividend. Make sure to keep an eye on this stock along with the steel industry as the future looks bright.
Disclosure: Nucor (NUE - Free Report) is a current holding in the Zacks Income Investor portfolio.
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Steel Producer Breaks Out Amid Powerful Uptrend
“Steel represents the triumph of human ingenuity.” - Unknown
The steel industry is often heralded as the backbone of modern society. Its history is shrouded in mystery, with origins dating back over 4,000 years. A durable companion to humanity over time, steel has helped shape industries through vast periods of innovation.
The landscape of the steel industry continues to evolve at a rapid pace. Select winners have emerged that were able to adapt to the broader economic and societal changes; these stocks are telling us a story with their phenomenal returns.
While many commodity stocks have pulled back off their highs from last year, the bullish run for steel stocks remains well intact.
Steel ETF Powers to New Heights
History has also illustrated countless times that stock trends tend to last longer than many investors realize – particularly strong uptrends breaking out to new highs. The VanEck Vectors Steel ETF (SLX - Free Report) has outperformed since the last official U.S. recession, delivering a 245% return over this timeframe:
Image Source: StockCharts
The SLX ETF seeks to replicate the performance of the NYSE Arca Steel Index, which is intended to track the overall performance of the companies involved in the steel sector. This index has more than tripled in value from the March 2020 bottom.
The Zacks Steel – Producers industry group is outperforming the market over the past 3 months. While showing volatile returns from a longer-term perspective, this group has widely outpaced the market over the past several years as well:
Image Source: Zacks Investment Research
Despite the impressive performance, stocks within this group remain relatively undervalued:
Image Source: Zacks Investment Research
Leading Producer Soars to 52-Week High
Many investors may feel conservative about investing in a stock that is trading near a 52-week high. Rather than viewing the price level as concerning, history has shown us that a stock hitting new 52-week highs is a telling sign of strength. Only the strongest stocks that are in the most powerful uptrends print fresh yearly highs, and one steel stock is displaying that exact behavior at this very moment.
Nucor (NUE - Free Report) is a leading producer of structural steel, steel bars, steel joists, and cod finished bars in the United States. The company boasts 123 operating facilities primarily in North America. Nucor is also engaged in steel trading and the rebar distribution business. It serves the agricultural, automotive, construction, energy, infrastructure, and transportation industries.
Image Source: Zacks Investment Research
NUE makes up nearly 8% of the total SLX ETF holdings. Nucor is committed to expanding its production capabilities and growing its business through strategic acquisitions. Its efforts to boost production capacity through numerous growth projects should drive profitability, strengthening its position as a low-cost producer. The steel company is also seeing strong momentum in the non-residential construction market and heavy demand in the equipment market.
Building on the bullish theme, Nucor has established a healthy track record of exceeding earnings estimates. In its fourth-quarter results, Nucor posted earnings of $3.16/share, an 11.66% surprise over the $2.83/share consensus estimate. NUE has delivered a trailing four-quarter average earnings beat of 9.92%. Analysts have also been increasing earnings estimates across the board lately:
Image Source: Zacks Investment Research
In addition to significant share price appreciation, Nucor also pays a $2.16 (1.16%) dividend. Make sure to keep an eye on this stock along with the steel industry as the future looks bright.
Disclosure: Nucor (NUE - Free Report) is a current holding in the Zacks Income Investor portfolio.