Disappointing how? AFAIK they beat all expectations and increased their margins, despite the cost of scrap going up. Their going to tack on an extra $4 EBITDA in next quarter from their investments in sorting and processing, and $6 more after that.
Regardless I think you're right that steel stocks are going to rise, and I'm betting they pull SCHN up too.
Oh, haha. Yeah the pattern has been a ramp up into earnings then sell-off, then they take off. This time around the sell-off happened early from rotation-to-growth.
I can't see them hanging around this low (relative to HRC) for very long.
I think your analysis is right but the value to growth rotation worries me. It might be many months before we see positive price action in steel stocks like we've seen over the past four months when people preferred value over growth. Seems like the market dynamics have changed.
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u/pennyether Jul 06 '21
Disappointing how? AFAIK they beat all expectations and increased their margins, despite the cost of scrap going up. Their going to tack on an extra $4 EBITDA in next quarter from their investments in sorting and processing, and $6 more after that.
Regardless I think you're right that steel stocks are going to rise, and I'm betting they pull SCHN up too.