3 Steel Stocks Boosted By Trump
Reports that President Trump is looking at imposing tariffs on imported steel have boosted these steel stocks
While U.S. equities in general remain range bound and moribund as investors contend with headwinds like uneven economic growth and a hawkish Federal Reserve, we’re seeing the reappearance of some of the “Trump-flation” trade amongst steelmakers. The Market Vectors Steel (ETF) (NYSEARCA:SLX) is up 1.5% on Friday to push above its 200-day moving average in what looks like an exit from a five-month downtrend.
Since peaking in February, the SLX fell more than 20% into the low set two weeks ago. But now, reports that President Trump is looking at imposing tariffs on imported steel is sending the industry group higher in a big way.
The combination of fundamental tailwinds, technical strength and a modicum of value after a nasty pullback makes the move attractive to new money. Here are three steel stocks looking to benefit:
Steel Stocks Boosted by Trump: AK Steel Holding Corporation (AKS)
Shares of AK Steel Holding Corporation (NYSE:AKS) attempted to break up and out of their two-month uptrend channel on Friday, threatening to cross back above the 200-day moving average that was last tested in April. AKS shares fell more than 50% from their early January high as the “Trump-flation” rally faded amid a walking back of nationalistic trade threats and a slowdown in auto production. But with Trump apparently frustrated with China’s inability to control North Korea, he is looking at imposing a 20% tariff.
The company will next report results on July 25 before the bell. Analysts are looking for earnings of 14 cents per share on revenues of $1.56 billion. When the company last reported results on April 25, it reported earnings of 19 cents per share, which was 5 cents better than expected. Revenue increased 1% from the prior year period.
Steel Stocks Boosted by Trump: Cliffs Natural Resources Inc (CLF)
Shares of iron ore supplier Cliffs Natural Resources Inc (NYSE:CLF) are emerging from its five-month downtrend and have pushed above its 50-day moving average. Watch for a test of the 200-day average — up 10% from here — ahead of a return to the early March trading range near $9, which would be worth a near 30% gain for CLF.
The company will next report results on July 27 before the bell. Analysts are looking for earnings of 28 cents per share of CLF on revenues of $704.7 million. When the company last reported results on April 27, earnings of 16 cents per share missed estimates by 4 cents on a 51% increase in revenue from last year. Edge Pro subscribers are up 3% in the stock since adding a position earlier in the week.
Steel Stocks Boosted by Trump: United States Steel Corporation (X)
United States Steel Corporation (NYSE:X) shares are rising up and out of a three-month consolidation range and are pushing further away from their 50-day moving average. Watch for a closure of the post-earnings gap from late April ahead of a push to the 200-day moving average near $28 — which would be worth a near 30% gain for X from here.
The company will next report results on July 25 after the close. Analysts are looking for earnings of 49 cents per share on revenues of $3.2 billion. Cowen analysts note that X has underperformed peers like Nucor Corporation (NYSE:NUE) in recent months on increased exposure to rolled steel and raw materials; but could be poised for a near-term opportunity now.
Note: Anthony Mirhaydari is the author of this article. Anthony is founder of the Edge and Edge Pro investment advisory newsletters. This article was originally published on June 30, 2017.
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Category: Industrial Stocks
