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Yahoo
5 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
6 days ago
- Business
- Yahoo
Why Steel Dynamics (STLD) is Gaining Attention for Materials Dividends in 2025
Steel Dynamics, Inc. (NASDAQ:STLD) is included among the 13 Best Materials Dividend Stocks to Buy Right Now. An aerial view of an industrial plant manufacturing welded pipes and tubes from stainless steel and galvanized carbon. Steel Dynamics, Inc. (NASDAQ:STLD) ranks among the largest steel producers in North America. Its main operation centers around electric-arc furnace (EAF) steelmaking, which relies on recycled scrap metal as its primary input. This approach has a lower environmental footprint compared to traditional blast furnace methods and plays a key role in the company's sustainability efforts. Steel Dynamics, Inc. (NASDAQ:STLD) is now working to expand into recycled aluminum products, aiming to broaden its income sources and customer base. Vertical integration remains a priority, with many of its own facilities—such as fabrication shops— utilizing steel and materials produced internally. Initiatives like biocarbon use and circular manufacturing are also helping the company manage costs, stay compliant with regulations, and support growing customer demand for more sustainable supply chains. Steel Dynamics, Inc. (NASDAQ:STLD) is a strong dividend payer with a robust cash position. In the most recent quarter, the company reported an operating cash flow of $302 million and paid $75 million in dividends. In addition, it has raised its payouts for 13 consecutive years, which makes it one of the best dividend stocks. The company pays a quarterly dividend of $0.50 per share and has a dividend yield of 1.57%, as of July 29. 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: and Disclosure: None. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Global News
24-07-2025
- Business
- Global News
U.S. steelmakers say Trump's tariffs ‘working,' want Canada to follow suit
Some top American steel producers are cheering on U.S. President Donald Trump's tariffs on foreign steel while raising prices on their own products, with one steelmaker urging Canada to copy Trump's protectionist trade policies. Both Cleveland-Cliffs and Steel Dynamics said in their latest quarterly earnings reports this week that they are charging buyers about 14 per cent more than they did in the previous quarter, while Acerinox said it is considering doing the same as soon as this fall. Economists say such price increases are a natural result of tariffs, and are warning Canada to avoid the Trump administration's 'sledgehammer' approach that ends up squeezing buyers. 'A scalpel approach is much more necessary here, because it's so complex,' said Harish Krishnan, a professor at the University of British Columbia's Sauder School of Business who focuses on supply chain management. Story continues below advertisement The U.S. approach, he added, 'is going to be negative for costs in the short and long term.' 4:26 Federal gov't response to latest U.S. Tariffs Steel Dynamics reported on Tuesday its average steel price in the second quarter of this year was US$1,134 per tonne, up from US$998 in the first quarter. Cleveland-Cliffs said it was selling steel during the same quarter at US$1,015 a tonne on average, up from US$980 in the first quarter. Acerinox, the largest producer of stainless steel in the U.S., said in a post-earnings call Thursday it was also looking to increase its prices later this year, but CEO Bernardo Velazquez acknowledged doing so 'is not easy under the current circumstances.' The CEO of Daimler Truck North America, which buys steel for the school buses and semi-trucks it manufactures, told the New York Times this week that it would be difficult to pass on the higher steel costs to its customers, particularly at a time of lower demand for its products. Story continues below advertisement The company said last week it was reducing its workforce by 2,000 employees. 'Whenever you introduce a tariff, it has two effects,' said Werner Antweiller, an economics professor and chair in international trade policy at the University of British Columbia. 'It basically raises the prices in the market overall because it curtails output, and so consumers are paying a higher price overall, and then the domestic producers are pulling even to the price of the foreign producers.' Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Antweiller said those higher costs will have downstream impacts not just on buyers like Daimler Truck, but also the North American auto industry, which relies on steel and aluminum — including American automakers that Trump has said he wants to protect. Despite those impacts, Krishnan said, 'As profit maximizers, it makes total sense for the sellers to raise their prices.' 8:50 Automotive parts manufacturers association doesn't want countertariffs Both Cleveland-Cliffs and Steel Dynamics said they expect prices to remain stable in upcoming quarters — meaning they will remain at higher levels. Story continues below advertisement In a post-earnings call Tuesday, Cleveland-Cliffs CEO Lourenco Goncalves described the 'strong improvements in pricing' and said Trump's steel tariffs, which went up to 50 per cent in June, 'have played a significant role in supporting the domestic steel industry.' The company told investors that imported steel has dropped from 25 per cent of the U.S. market share in January to 20 per cent in April and May, after Trump first re-imposed the tariffs at a 25 per cent rate. Executives at Steel Dynamics were more muted. While CEO Mark Millett said higher prices had boosted profitability for the company, 'the uncertainty regarding trade policy continues to cause hesitancy in customer order patterns across our businesses.' Canada needs 'significant' steel tariffs, CEO says The uncertainty has roiled Canada's own steel industry, which, like the U.S., has historically contended with imports and has called on the federal government to stop foreign dumping of steel due to Trump's tariffs. Story continues below advertisement Prime Minister Mark Carney last week said Ottawa will change its steel tariff-rate quotas from 100 per cent to just 50 per cent of 2024 volumes for non-free trade agreement countries. Any imports that fall above that rate will face a 50 per cent tariff, which will also be applied to imports from free trade agreement partners above 100 per cent of 2024 volumes. Additional duties will also be imposed on 25 per cent of steel imports from all non-U.S. countries that contain steel melted and poured in China before the end of July, Carney added. Goncalves on Tuesday claimed the new measures will only affect 17 per cent of the steel imported to Canada, and urged Carney to expand its tariffs to all foreign trade partners in line with the U.S. He said countries with free trade agreements 'continue to use Canada as their outlet for overproduction.' Cleveland-Cliffs owns the Canadian steel company Stelco after buying it from U.S. Steel last year. 'If Prime Minister Carney and his cabinet really want to have a steel industry in Canada, they should put in place significant trade protections,' Goncalves said during Tuesday's call. 'Then they will have a strong domestic steel industry in Canada, able to support a vibrant and domestic Canadian market. 'We are doing just that here in the United States, and it's working.' Story continues below advertisement 1:30 Carney announces steel tariff countermeasures in support of workers Antweiller warned Ottawa against following that advice. 'It would actually raise prices here in Canada too, and that would again hurt the industry downstream,' he said. 'And that is even more important because there are so many more jobs in the auto industry than there are in the steel industry.' The Canadian Steel Producers Association, whose membership includes Stelco, declined to comment on Goncalves' comments when asked by Global News. The industry group last week applauded the federal government's updated measures to protect Canada's steel sector, after criticizing the initial plan announced last month that included lower tariff rate quotas. Yet companies are seeing damage to their own bottom lines. Algoma Steel confirmed Thursday it was in talks with the federal government about potential liquidity relief measures, including an application to the federal Large Enterprise Tariff Loan program for $500 million. Story continues below advertisement Industry Minister Melanie Joly told reporters early this month the government was talking to Rio Tinto about potential liquidity relief as well. Both Goncalves and Millett, the Steel Dynamics CEO, said Tuesday they expect the steel and aluminum tariffs to stay in place even under negotiated trade deals that see other country or sector-specific tariffs removed. 'So far, there is no indication that the Section 232 tariffs will be used as a bargaining chip by the Trump administration as leverage in trade deals with other countries,' Goncalves said. Federal negotiators have said the steel and aluminum tariffs have been a focus of talks with the U.S. toward a new trade and security deal. Trump has threatened Canada with new tariffs starting Aug. 1 unless a deal is set. Economists are hopeful that the White House begins to see the damage that will be created if the tariffs remain in place. 'Our integrated market is worth so much to both sides, and moving away from this is going to hurt the Americans as much as us,' Antweiller said. 'I think that realization ought to take hold in the United States.'
New York Times
22-07-2025
- Business
- New York Times
American Steel Just Got More Expensive. Buyers Blame Tariffs.
American steel makers are raising prices, forcing new costs onto domestic manufacturers that make everything from cars to military tanks. The increases come on the back of President Trump's tariffs on steel and aluminum. Two big American producers, Cleveland-Cliffs and Steel Dynamics, reported on Monday that they had charged more for their products in the second quarter of this year than they did in the first quarter. About a fifth of the steel sold in the United States is imported. The steel tariffs, which were raised last month to 50 percent from 25 percent, have made imports of the metal much more expensive, giving American steel mills the leeway to increase their prices. And as imports have declined, American producers have more power to opportunistically increase their prices, buyers said. 'You always see that as one of the traps of a tariff,' said John O'Leary, the chief executive of Daimler Truck North America, which buys large amounts of steel to make Freightliner and Western Star trucks and Thomas Built school buses. American steel makers, he said, now have 'more headroom to be able to raise the price.' Daimler Truck has tried to pass on some of the costs of the tariffs on steel and aluminum, the other metal on which the Trump administration has imposed tariffs. When steel and aluminum tariffs were at 25 percent this year, the company added approximately $3,500 to the price of a Thomas Built school bus, which on average costs around $100,000. When asked if Daimler would raise prices further now that the tariffs had reached 50 percent, Mr. O'Leary said it was hard to pass on extra costs to customers in the current market. On the Rise The steel market has settled from the supply-chain issues caused by the Covid-19 pandemic in 2021, but President Trump's latest round of tariffs on steel has pushed prices up in the United States recently. $2,000 a metric ton Price of steel in each market 1,500 1,000 United States Western Europe 500 China '10 '15 '20 '25 $2,000 a metric ton Price of steel in each market 1,500 1,000 United States Western Europe 500 China '00 '05 '10 '15 '20 '25 Prices are averages of hot-rolled bands of steel. Source: SteelBenchmarker By Karl Russell Want all of The Times? Subscribe.
Yahoo
21-07-2025
- Business
- Yahoo
Steel Dynamics shares down after Q2 earnings miss
-- Steel Dynamics posted second-quarter earnings below Wall Street expectations amid lingering trade policy uncertainty and an inventory overhang in coated flat rolled steel pressured shipments. The company reported earnings per share of $2.01, missing the consensus estimate of $2.26. Revenue fell to $4.6 billion, also short of the expected $4.73 billion. Despite the miss, CEO Mark Millett said steel pricing stabilized at higher levels during the quarter, helping drive a 39% sequential improvement in consolidated operating income and a 19% gain in adjusted EBITDA. The margin expansion was led by stronger performance in the company's long products operations. However, customer hesitancy due to unsettled trade policy and excess inventory weighed on volumes. 'This hesitancy, combined with an inventory overhang of coated flat rolled steel, resulted in lower steel and steel fabrication shipments,' Millett said in the release. The company also reaffirmed its long-term growth outlook, citing expansion into value-added steel and aluminum flat rolled products. Shares of Steel Dynamics (NASDAQ:STLD) were down more than 3% at $137 in aftermarket trading. YTD, down about 10%. Related articles Steel Dynamics shares down after Q2 earnings miss Victoria's Secret Exposed: The Warning Sign Behind the Stock's 52% Collapse Surge of 50% since our AI selection, this chip giant still has great potential
