15 Small-Cap Construction and Materials Stocks Hedge Funds Are Buying

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6. Steel Dynamics Inc. (NASDAQ:STLD)

Market Capitalization as of April 28: $19.00 billion

Number of Hedge Fund Holders: 45

Steel Dynamics Inc. (NASDAQ:STLD) is a steel producer and metal recycler. It operates through four segments: Steel Operations, Metals Recycling Operations, Steel Fabrication Operations, and Aluminum Operations. The company is heavily involved in the materials and construction industries. Its products are used in markets like construction, automotive, manufacturing, and transportation.

The company’s Steel Operations segment made $230 million in operating income for Q1 2025. This was fueled by a record-breaking shipment volume of 3.5 million tons of steel. The segment had to navigate a tightening of metal spreads in this period, with the average realized external steel price experiencing a $13 per ton dip and the average scrap price climbing by $16 per ton.

The Steel Operations segment also propelled the Sinton facility’s transition to positive EBITDA during the quarter, operating at a commendable average of 86% capacity and frequently surging beyond 90%. 75% to 80% of the Steel Operations’ flat-rolled steel business operates under contracts that lag market fluctuations by ~2 months. This suggests that the recent upward trends observed in flat-rolled steel pricing will potentially exert a positive influence on the segment’s financial outcomes in Q2.

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