An Insider Is Looking for a Rebound at United States Steel Corporation (X)

Page 1 of 2

According to a Form 4 filed with the SEC, Murry Gerber, a member of the Board of Directors at United States Steel Corporation (NYSE:X), directly acquired almost 13,000 shares of the company’s stock on May 8th at an average price of $18.50 per share. We track insider purchases because, in theory, insiders should be quite hesitant to increase their company-specific risk in this way. Unless they have a good deal of confidence in the stock, it is rational for them to diversify instead. Studies somewhat back this up, showing a small outperformance effect for stocks bought by insiders (read our analysis of studies on insider trading).

United States Steel Corporation (NYSE:X) is down 90% from its levels five years ago, including a 27% decline in the last year. In the first quarter of 2013, its revenue declined by 11% versus a year earlier as the demand for steel- which is closely tied to overall macro activity (as shown by the stock’s beta of 1.8)- has continued to be low as China slows down somewhat and growth in Europe continues to be stagnant. Operating income also declined if we add back a loss on disposal of assets to the first quarter of 2012, and with U.S. Steel’s interest expenses taken into account the company was unprofitable for the quarter. Cash flow from operations was about $230 million, down from a year ago but enough to cover capital expenditures.

Wall Street analysts are predicting a poor 2013 for United States Steel Corporation (NYSE:X) but then a strong recovery in the following year- specifically, the forward P/E is 12. Of course, we wouldn’t want to rely entirely on sell-side forecasts (which often tend to be too rosy) but we can at least see where the insider purchase is coming from- an agreement that business conditions will improve. Interestingly, earlier this month we had found several company insiders at Walter Energy, Inc. (NYSE:WLT) buying stock; Walter Energy, Inc. (NYSE:WLT) is a major producer of metallurgical coal, which is used in the production of steel, and that company has been struggling over the past couple years as well.

David Shaw

In addition to insider trading activity we also follow quarterly 13F filings from hedge funds and other notable investors; we use this information to develop investing strategies (the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year) and to track interest in individual stocks. According to our database, Renaissance Technologies (which was founded by billionaire Jim Simons) owned almost 2 million shares of United States Steel Corporation (NYSE:X) at the end of December (check out Renaissance’s stock picks). Billionaire David Shaw’s D.E. Shaw reported a position of 1.4 million shares (find D.E. Shaw’s favorite stocks). However, a number of market players are bearish on United States Steel Corporation (NYSE:X) with the most recent data showing 29% of the float held short.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!