In this article we discuss the 5 best steel stocks to buy amid upcoming infrastructure, construction boom. If you want to read our detailed analysis of these companies, go directly to the 10 Best Steel Stocks to Buy Amid Upcoming Infrastructure, Construction Boom.
5. Gerdau S.A. (NYSE: GGB)
Number of Hedge Fund Holders: 11
Gerdau is a Brazilian steel company whose stock has gained over 100% in the last 12 months. The company is benefitting from the increasing prices and demand in the local markets. The company’s management in the past has practiced strict capex measures to control costs. However, for 2021, the company upped its capex guidance to R$ 3.5 billion, more than double the level of 2020. However, roughly R$1.5 billion of this would be used for maintenance, innovation and technology.
As of the end of the first quarter, 11 hedge funds in Insider Monkey’s database of 887 funds held stakes in GGB, compared to 15 funds in the fourth quarter. Contrarian Capital is the biggest stakeholder in the company, with 19.9 million shares, worth $106 million.
4. Steel Dynamics, Inc. (NASDAQ: STLD)
Number of Hedge Fund Holders: 26
Steel Dynamics is an Indiana-based company that has been on a tear recently. The stock has gained 72% year to date. The company deals in categories like hot-rolled sheet steel, structural steel and merchant steel. Close to 48% of its products are related to construction. The company’s recycling operations are also at a very large scale.
In April, Bank of America’s Timna Tanners upgraded the stock to Buy and increased the price target to $61 from $49. The analyst said that the company has “well-positioned” balance sheets.
The company is also getting the attention of the smart money, as 26 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the first quarter, down from 27 funds a quarter earlier.
3. Cleveland-Cliffs Inc. (NYSE: CLF)
Number of Hedge Fund Holders: 36
GLJ Research’s Gordon Johnson recently maintained a Buy rating on the stock and increased his price target to $28.35 from $22.09. The analyst said that the stock trading at around 0.6x forward 2022 and 2023 EBITDA shows that it has a “substantial upside potential when extrapolating today’s prices.”
Cleveland-Cliffs (NYSE:CLF) is in the spotlight on June 15 after the company upped its guidance for adjusted EBITDA for the current quarter and full year.
As of the end of the first quarter of 2021, Fisher Asset Management owns 13 million shares of CLF worth $262.8 million. CLF accounts for 0.18% of Fisher Asset’s total portfolio.
2. Olympic Steel, Inc. (NASDAQ: ZEUS)
Number of Hedge Fund Holders: 9
Olympic Steel is an Ohio-based steel company that ranks 2nd in our list of the best steel stocks to buy amid upcoming infrastructure and construction boom. The company’s primary business is flat-rolled steel products, which are used in automobile, domestic appliances, shipbuilding and construction. The stock suffered in 2020 amid declining economic activity, but is set to gain from the expected increase in auto sales and construction activity. In 2020 it also acquired Action Stainless & Alloys, a Texas-based stainless steel and aluminum plate company.
Royce & Associates currently holds 291,103 shares of ZEUS that amounts to $8.6 million. ZEUS occupies 0.05% of Royce & Associate’s total portfolio.
1. Tata Steel Limited (NSE: TATASTEEL.NS)
Number of Hedge Fund Holders: N/A
Tata Steel is one of the most notable steel companies in the world. India is a huge market where construction activity is set to boom for years to come. Tata Steel is currently trading on the Indian stock exchange, at roughly 1,173.00 Indian Rupees ($16). Chandan Taparia of Motilal Oswal recently gave a Buy rating to the stock with a price target of 1215 Indian Rupees.
You can also take a peek at Top 10 Health Insurance Stocks to Buy and 10 Best US Stocks to Buy Now.
