Latest news with #Nucor
Business Insider
3 days ago
- Business
- Business Insider
Why nuclear is the center of the stock market's energy trade in 2025
Nuclear energy stocks got a big boost this week after US Transportation Secretary and interim NASA administrator Sean Duffy announced plans to expedite a nuclear reactor on the moon. The comments sent stocks such as Oklo, Nucor and Nano Nuclear Energy jumping, with the gains extending into Wednesday's session. But it's more than seemingly one-off comments that's boosting nuclear stocks this year, and the alternative power source has become the hottest energy trade out there in 2025. Nuclear power has come sharply into focus in recent years, with advocates including Tesla CEO Elon Musk and, more recently, the Trump White House. A quick look at the energy sector reveals that nuclear energy is outpacing its peers. The VanEck Uranium and Nuclear ETF (NLR) is up almost 50% year-to-date, compared to the Utilities Select Sector SPDR ETF (XLU), which is up 13%, and the Energy Select Sector SPDR ETF (XLE), which is down about 1% this year. Nuclear energy is riding the AI wave It's hard to examine the growth of nuclear energy stocks in 2025 without talking about the role of nuclear in the AI boom. AI demand has continued to skyrocket as companies have doubled down on capex plans in the space. Dizzying demand for data centers has created an equally enormous need for power. Goldman Sachs predicts that data center power demand will increase 165% by 2030. That's sparked a search for alternative power sources to support the continued growth of data centers and AI. "It was easy and fast to reactivate nuclear reactors to meet the growing demand for clean energy from data centers," said Alexander Lis, chief investment officer at Social Discovery Ventures. "Other energy sources were either less clean, like coal, or longer to build, like wind or solar." Lis added that his firm considers this demand to be sustainable, as "many big tech companies have already announced their plans to use nuclear energy for their data centers." Last September, Constellation Energy said it would reopen Three Mile Island, with Microsoft set to purchase the power power generated by the site. Eric Schiffer, chairman and CEO of The Patriarch Organization and a nuclear energy investor, echoed this sentiment, highlighting the role that it may play in helping the US achieve AI dominance. "China [is] far more equipped right now from an energy platform perspective," he stated. "Nuclear is a critical piece to ensure we're staying at pace. You can't lose this race over an energy constraint." An under-the-radar Trump trade Schiffer and others believe that Trump's focus on AI will benefit nuclear energy stocks in the near term. "The Trump administration's policy priorities to support AI advancement and the unleashing of American innovation has been centered around a deregulation focus and a markets-driven all-of-the-above energy strategy," said Jeff Le, managing principal at consulting firm 100 Mile Strategies. "It includes an audacious goal of quadrupling US nuclear energy capacity to 500 gigawatts by 2050." Le added that Trump's recent executive orders put "nuclear reactor licensing, fuel reprocessing, and domestic production, at the top of its 'Energy Dominance' agenda." The cumulative effect of already soaring demand for power from AI and Trump's turn away from renewables in the search for alternative power sources means nuclear has been a big winner this year. Importantly for investors, Schiffer thinks this bullish period will continue for another 18 months or so.
Yahoo
3 days ago
- Business
- Yahoo
Is Cleveland-Cliffs Stock a No-Brainer Steel Play?
Key Points Cleveland-Cliffs is one of the largest steel mills in North America. The company's production is largely centered around blast furnaces. Cleveland-Cliffs is something of a boom-or-bust investment. 10 stocks we like better than Cleveland-Cliffs › Not too long ago, Cleveland-Cliffs (NYSE: CLF) didn't make steel -- it was just a supplier to the steel industry. Then a series of huge acquisitions changed the story. Now Cleveland-Cliffs is one of the largest and most important steel makers in North America. But is that enough to make it a no-brainer steel play? It depends on what you're looking for. What does Cleveland-Cliffs do? At this point, Cleveland-Cliffs is a vertically integrated steel maker. That means it owns steel mills, but it also owns the key inputs it requires to make steel, like iron ore. Although the company makes some fabricated and specialized products out of its steel, most of its production is really just commodity-based. So steel prices have a big effect on the top and bottom lines. The real key here, however, is that Cleveland-Cliffs' production is centered around blast furnaces. This is an older steel-making technology that involves high operating costs. When demand is strong and steel prices are high, Cleveland-Cliffs can have robust earnings results. However, when utilization rates fall and steel prices are low, the company can bleed red ink. Sometimes the losses are pretty painful to live through. Peers like Nucor (NYSE: NUE) are centered around electric-arc mini-mills, a newer steel-making technology. To simplify things, Nucor's manufacturing assets can be ramped up and down more easily to adjust for changes in demand and steel prices. As such, it tends to have stronger margins through the entire steel cycle. Often Nucor will just have weaker earnings at a time when Cleveland-Cliffs will be losing money. For those looking to invest in the steel industry for the long term, Nucor is likely to be the better investment choice. Notably, Nucor is a Dividend King, with over five decades of annual dividend hikes speaking to its more consistent financial results. Playing the swings in a cyclical industry That said, steel is a cyclical business. If you're looking to buy Nucor for the long term, now could be a good time to jump aboard, because the sector is a bit out of favor at the moment. But what if you don't actually want to own a steel stock for the long term? The caveat here is that trying to time market swings isn't the best idea for most investors. It's high-risk, and a bad call can leave you with a losing investment. Yet, the steel industry does reliably go through boom and bust cycles. Buying in the bust phase, as suggested above with Nucor, can get you in the door when steel stocks are cheap. If you do that with Cleveland-Cliffs, you'd set yourself up for a larger rebound because of the boom-and-bust nature of its earnings. Indeed, when the steel market rebounds, Wall Street is likely to reward Cleveland-Cliffs' stock more than Nucor's -- at least, over the short term. The next bust will likely be more punishing for Cleveland-Cliffs' business than it will be for Nucor's, which will likely lead to a steeper drop when the steel industry shifts gears again. In other words, you'll want to get out of Cleveland-Cliffs before the drop if you're trying to time the steel cycle. Is Cleveland-Cliffs stock a no-brainer steel play? Cleveland-Cliffs is not a no-brainer investment. In fact, it requires a lot of brain power, because you need to understand the often volatile nature of its business and how that's affected by the broader trends in the steel industry. If you prefer simple investments that you buy and hold for the long term, Nucor will be a better steel choice. But if you like trading, you may prefer to ride the ups and downs in Cleveland-Cliffs' business. Just go in with an understanding of the risks you're taking on. Should you invest $1,000 in Cleveland-Cliffs right now? Before you buy stock in Cleveland-Cliffs, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Cleveland-Cliffs wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $619,036!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,092,648!* Now, it's worth noting Stock Advisor's total average return is 1,026% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Reuben Gregg Brewer has positions in Nucor. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Is Cleveland-Cliffs Stock a No-Brainer Steel Play? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
Steel Dynamics, Inc. (STLD): A Bull Case Theory
We came across a bullish thesis on Steel Dynamics, Inc. on Stock Picker's Journey's Substack by Gregg Jahnke. In this article, we will summarize the bulls' thesis on STLD. Steel Dynamics, Inc. 's share was trading at $127.56 as of July 31st. STLD's trailing and forward P/E were 18.51 and 14.29 respectively according to Yahoo Finance. Steel Dynamics (STLD) has been added to the Model 25 portfolio at $131, replacing AES, in a rare top-down decision driven by macroeconomic expectations rather than valuation. While the author typically favors bottom-up stock picks like Pepsi and Gentex, which were purchased at near-decade lows, the potential passage of the BBBill and a possible economic surge in 2026 prompted this more thematic move. STLD stands to benefit from pro-growth industrial policies, and with momentum shifting in favor of the bill's passage, exposure to a high-quality cyclical stock became desirable. A standout first-quarter earnings call reinforced conviction, as STLD's aggressive capital expenditure plans—particularly its efforts to reshape the aluminum industry—signal long-term vision. Notably, the company has repurchased 40% of its stock over the past decade and maintains a clean balance sheet, having recently refinanced debt with manageable near-term maturities. Although other aluminum plays like Century, Alcoa, and Kaiser were considered, STLD was viewed as superior, even compared to Nucor (NUE), due to its aluminum exposure. Wall Street's focus on short-term earnings has led to a misunderstanding of STLD's strategic positioning, as highlighted by analyst John Tumazos's incisive questioning on the Q1 call. The company's spread-based model in scrap steel and aluminum is seen as lower risk than perceived, with significant upside potential. Strong institutional support from Victory Capital, Norges Bank, and T. Rowe Price adds credibility to the investment. Though STLD has underperformed recently and issued a soft Q2 outlook, the long-term case for its role in rebuilding U.S. manufacturing justifies the timing of this buy. Previously, we covered a on Steel Dynamics, Inc. (STLD) by Gregg Jahnke in February 2025, which highlighted the company's capital discipline, low-cost structure, and long-term potential. The company's stock price has depreciated approximately by 4% since our coverage due to near-term macro headwinds. Gregg Jahnke shares a similar view but emphasizes a top-down, policy-driven case based on expected 2026 growth. Steel Dynamics, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held STLD at the end of the first quarter which was 45 in the previous quarter. While we acknowledge the potential of STLD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30-07-2025
- Business
- Yahoo
Nucor Corp (NUE) Q2 2025 Earnings Call Highlights: Strong Financial Performance and Strategic ...
EBITDA: Approximately $1.3 billion for the second quarter. Earnings Per Share (EPS): $2.60 per diluted share. Shareholder Returns: $329 million returned through dividends and buybacks in the quarter; $758 million total for the first half of the year. Capital Expenditures: $954 million for the quarter; on track for approximately $3 billion for the year. Steel Mills Segment Pretax Earnings: $843 million, more than triple the prior quarter. Steel Products Segment Pretax Earnings: $392 million, a 28% increase over the previous quarter. Raw Materials Segment Pretax Earnings: Approximately $57 million, a 95% increase over the first quarter. Net Earnings: $603 million for the second quarter. Debt and Cash Position: Total debt to capital ratio of approximately 24%; cash of approximately $2.5 billion. Steel Mills Backlog: Up nearly 30% over the same time last year. Steel Products Backlog: Up approximately 20% from a year ago. Warning! GuruFocus has detected 3 Warning Sign with GPK. Release Date: July 29, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Nucor Corp (NYSE:NUE) achieved a significant improvement in financial performance with an EBITDA of approximately $1.3 billion and earnings of $2.60 per diluted share, driven by higher average selling prices and stable realized pricing. The company returned $329 million to shareholders through dividends and buybacks in the second quarter, totaling $758 million for the first half of the year. Nucor's Brandenburg plate mill achieved positive EBITDA for the quarter, with shipments reaching record levels, indicating strong operational performance. The Steel Products segment saw a 28% increase in pretax earnings over the previous quarter, with robust demand and healthy backlog levels extending into 2026. Nucor's strategic investments in new facilities, such as the rebar micro mill in Lexington and the Kingman melt shop, are progressing well, with several projects nearing completion, positioning the company for future growth. Negative Points Nucor expects consolidated earnings to be nominally lower in the third quarter due to modest margin compression in the Steel Mills segment. The company faces challenges from unfairly traded imports, particularly in corrosion-resistant and rebar products, necessitating ongoing trade law enforcement. Preoperating and start-up costs remain a concern, with approximately $136 million incurred in the second quarter, impacting overall profitability. The potential impact of tariffs, particularly on Brazilian imports, poses a risk to raw material costs and could affect margins if implemented. Despite strong demand, the pricing environment is described as broadly stable, with some segments experiencing margin compression due to lag effects in pricing realization. Q & A Highlights Q: On Steel Products, you mentioned margin compression. Can you break that down for us? Is it due to higher input costs? How should we think about pricing directionally from the second to the third quarter? A: Leon Topalian, CEO: The nominal adjustment in pricing isn't due to weak demand drivers but rather a lag effect from orders taken in late Q4 or early Q1 now being realized. We've recently announced a price increase, and demand drivers remain robust. John Hollatz, EVP: Margin expansion and contraction are normal with steel price movements. Our downstream businesses have custom-engineered products with value-added solutions, and demand remains solid. Q: Among the steel products, which are running at relatively lower utilization, and what are your best opportunities to displace imports in the second half of the year? A: Leon Topalian, CEO: Our capability set is the most diverse among North American steel producers. We're running roughly 85% utilization rates across the steel mills segment, with more opportunities in sheet, plate, rebar, and long products. Import levels are still too high, and we advocate for strong, fair trade. Q: Could you speak to the preoperating start-up costs and the period-by-period outlook for Lexington and Kingman as they start contributing to EBITDA positively? A: Leon Topalian, CEO: We're excited about the Lexington micro mill and Kingman, Arizona, both geographically well-positioned. Stephen Laxton, CFO: Pre-op start-up costs came down quarter-over-quarter, driven by Brandenburg reaching breakeven. Expect $140 million to $150 million in pre-op costs per quarter for the second half of the year. Q: Can you talk about the margin compression expected in the steel mills segment for the third quarter? A: Leon Topalian, CEO: The potential pressure in flat sheet, particularly due to slabs from Brazil, could impact earnings. We have mitigation strategies, including self-supply through our sheet mills. There's significant upside in other segments like Brandenburg, long products, and beams. Q: Are there any direct tax benefits from the "big beautiful bill" in the back half of the year or for 2026? A: Stephen Laxton, CFO: The bill is forward-facing, with limited immediate benefits. It will have a pronounced effect on R&D spending, allowing us to expense it upfront rather than amortizing over seven years, providing positive net present value benefits. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. 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CNBC
29-07-2025
- Business
- CNBC
Nucor CEO on earnings: Tariff impact was minimal and demand drivers remain robust
Leon Topalian, Nucor CEO, joins 'Closing Bell: Overtime' to discuss the company's latest quarterly earnings results, the proposed merger between Union Pacific and Norfolk Southern and much more.
