Five Ways To Profit From The Commodity Nobody Likes

Tony Daltorio, Investment U Research

Forget Superman… the real man of steel is Lakshmi Mittal, chairman of the world’s biggest steelmaker, Arcelor Mittal ADR (NYSE: MT).

Mittal has built an empire – and a personal fortune – by being optimistic when it comes to the global steel industry. And he still maintains that confidence today, recently going on record to say that global demand could rise by more than 10% in 2010.

Meanwhile, many of his peers in the industry sport trembling lower lips over their present and future.

Believe it or not, that ongoing debate matters to everybody, not just those investing directly in the commodity. Steel demand feeds into a huge range of sectors, so much so that many regard it as an important bellwether of industrial trends.

The Half-Empty, Steel Glass

Other than

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div style="text-align: justify;"Goldman Sachs is upgrading span style="font-weight: bold;"AK Steel (NYSE:AKS) /spanto Buy from Neutral and adding it to thebr /Americas Conviction Buy List. They recommend AKS for near-term to medium-term investors primarily due to its high sensitivity to steel prices. Its electrical steel segment should remain highly profitable and should get a boost from global stimulus packages, particularly in China. Firm's new 6- month P/E and EV/EBITDA based target price of $15 (increased from $9) implies the highest potential upside in their coverage of 34%. It should also benefit from lower iron ore prices next year.br /br /span style="font-weight: bold;"Goldman notes they see steel prices at an inflection point /spanbr /They remain positive on the steel sector in the near-term owing to impressive supply discipline exhibited by the industry around the world which has helped prices to bottom at a significantly higher level than other commodities. Firm estimates that ...

December 16, 2008 ndash; RINO International Corp. (OTCBB:RINO) provides wastewater treatment equipment and energy management systems designed to reduce industrial pollution and enhance energy utilization ndash; two huge areas for growth, we think for the foreseeable future. The worldrsquo;s most populated country, China continues to experience rapid industrial growth, massive migration to urban areas and the result is a surge in emissions of pollutants, and its industrial pollution is becoming a critical issue not only in the region but on a global scale. RINOrsquo;s focus it on the iron and steel industry, which is one of the largest contributors to water pollution and sulphur emissions. Consider the fact that a population of 300 million people are expected to be moving into Chinarsquo;s cities in the next 24 to 36 months, and how much this is going to tax steel production, amongst other things. This, in turn will create a massive ...

The jury may still be out on how the $700-billion rescue package -- which has recently been agreed on by Congress -- will impact the economy, but for the time being, the broader market is lapping it up. And the joy is there for all to see in the steel sector, which has been under the whip for some time.

Shares of steel companies were hit last week when the Federal Reserve refused to change the benchmark federal fund rate. Add to it a strong dollar and slumping demands had led the likes of Arcellor Mittal (MT) to cut production. No wonder it was down around 3% on Tuesday.

But Arcellor Mittal is back with a bang on Thursday with an intraday gain of 7.53% till 1.20. But MT pales behind the 8.03% gain logged by Mechel Steel (MTL). Brazilian steel company Gerdau S.A. (GGB), too, is up 5%

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Several Money Morning readers have written to ask about steel-sector stocks, which have taken investors on a roller-coaster ride in the past year. After analyzing the sector, I came to one very strong conclusion: With its terrific fundamentals, Nucor Corp. (NYSE: NUE) is poised for significant gains. Steel stocks, which had seen a 36% climb this year, have sold off dramatically and are now down about 16% for the year.  That’s a 42% drop from their peak. Wow! Shares of the Charlotte, N.C.-based Nucor could not escape the carnage and have endured an even bigger swing: From their low of $50.30 a share in early January, the shares of the No. 1 U.S. steelmaker soared 66% to a trade at a high of $83.56. From their peak, Nucor’s shares have declined 42%, closing Friday at $48.45. They’re down 18% for the ...

Goldman Sachs is downgrading their view on US Steel Sector to Neutral from Attractive this morning:They are transferring coverage of the steel sector to Sal Tharani from Aldo Mazzaferro. Firm is also downgrading their coverage view for the sector to Neutral from Attractive due to the re-emergence of various risks-both perceived and real, such as rising dollar, "China fear", weak economic data out of the developed and emerging markets, and softness in steel and scrap prices. They believe that negative news flow in the near term would keep multiples compressed, and wait for a better opportunity to get more constructive on the sector.Nucor and US Steel remain Buy rated stocks. However, they are removing US Steel from Conviction Buy List and also upgrading STLD to Buy, replacing CMC, which is now rated Neutral. In the near term, the firm see smore ...

Iraq's oil minister has repudiated a Saddam Hussein-era contract with LUKOIL on grounds that it was "totally unfair.” Conversely, Iraq is reportedly on the verge of reviving an 11-year-old contract with China worth $1.2 billion, which would be its largest oil deal since the invasion in 2003. The Canadian prime minister says that gas dealings with Russia are being reconsidered in light of Georgian conflict. “From the beginning, oil and gas transmission has been at the centre of conflict [between Russia and Georgia].” Prime Minister Vladimir Putin reportedly supports the idea of granting equal access to Gazprom’s pipelines for independent gas producers. Mechel will be forced to reduce coal prices for the steel sector by 15% - less than previously feared.

ZACKS RANK BUY STOCKS * Aggressive Growth - Thoratec (THOR) recently posted impressive second-quarter results. The stock is trading near its 52-week high and showing strength.   * Growth & Income - Williams Companies (WMB) recently announced second-quarter adjusted earnings of 68 cents per share, topping the consensus estimate by 3%.   * Momentum - ManTech International (MANT) recently reported strong quarterly results and provided a bullish earnings forecast   * Value - Olympic Steel (ZEUS) announced a $1 special dividend as the steel sector remains hot. The company easily surprised on estimates for the second quarter.

Track Zack’s picks at:

http://trackthepros.com/categories.php?category_id=742

Olympic Steel announced a $1 special dividend as the steel sector remains hot. The company easily surprised on estimates for the second quarter by 58.82% and has beaten 2 out of the last 4 quarters on average of 11.52%. Olympic Steel has a forward P/E of 8.87.

Company Description

Olympic Steel, Inc. (ZEUS) distributes processed carbon, coated and stainless flat-rolled sheet, and coil and plate steel products in the United States.

ZEUS, a Zacks #1 Rank (Strong Buy), operates as an intermediary between steel producers and manufacturers that require processed steel for their operations. ZEUS operates 16 facilities across North America, predominantly in the Midwest.

Olympic Steel Reports a Record Second Quarter

On July 31, Olympic Steel reported record second quarter earnings that beat Wall Street estimates by $1.00 per share. Net income was $29.6 million, or $2.70 per share, compared to $9.4 million, or 88

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Financial NewsJason Corcoran in Moscow23 June 2008 Investment climate is steady as new leader continues reform agenda Russia’s equity markets are enjoying the country’s honeymoon period under its new leadership, but investors remain wary of how the power-sharing arrangement will evolve.The changing of the guard on May 7 saw Vladimir Putin hand over the presidential mantle to his protégé Dmitry Medvedev. Within hours, Medvedev had nominated his mentor Putin as Prime Minister.The smooth choreography proved to be a fillip for Russia’s main stock markets and sparked a buying spree by foreign funds.The MSCI Russia Index was the best performing emerging equity market last month, rising 15.7%, and outperforming the MSCI EM Emea index, which rose 7.3% in the same month. Inflows recorded in the third week of May of $542m (€350m) were the highest in Russia ...