Algoma Steel Group Inc. (ASTL): A Bull Case Theory 

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We came across a bullish thesis on Algoma Steel Group Inc. on Cundill Deep Value’s Substack by JiM. In this article, we will summarize the bulls’ thesis on ASTL. Algoma Steel Group Inc.’s share was trading at $3.3100 as of October 3rd. ASTL’s trailing and forward P/E were 14.30 and 9.12 respectively according to Yahoo Finance.

Algoma Steel (ASTL) presents a compelling investment opportunity as the only fully leveraged Canadian steel platform capable of supplying the country’s growing infrastructure pipeline. Trading at $4.73, the market is fixated on short-term noise—tariffs and a mixed quarter—while overlooking the structural advantage of its 1,600-acre deep-water industrial footprint, which includes docks, rail, power, a live EAF, and a plate mill.

The company benefits from a predictable, multi-year domestic steel demand driven by government-backed programs such as the National Shipbuilding Strategy (NSS), Ontario Line, Scarborough Subway Extension, YUL airport expansion, hospitals, and highways, all of which require heavy plate. Seaspan’s MoU to source steel domestically for shipbuilding further validates the pathway from policy to purchase orders, reducing logistical and tariff risks.

ASTL’s balance sheet and hidden assets support substantial upside. Conservative hidden-asset uplifts range from $86M to $425M, and replacement-cost calculations suggest the platform is worth $3.4–5.8B today, translating to $22–$45 per share net of liabilities. Even with reported equity of $937M and shares at 105M, the stock trades at just 0.53× book and 0.44× base-adjusted book, leaving significant margin of safety. Sequentially rising plate shipments, commissioning of the EAF, and early domestic infrastructure awards provide near-term visibility into cash flow, while the scarcity of domestic plate and long lead times for industrial waterfront regeneration act as structural moats.

Downside risks—including tariffs, EAF commissioning, and project timing—are largely temporal rather than terminal. With a combination of undervalued hard assets, imminent infrastructure catalysts, and a dominant position in Canadian plate supply, Algoma offers a high-conviction investment case with upside potential of 2–2.7× from current levels, while mitigating long-term downside through the tangible value of its industrial platform.

Previously we covered a bullish thesis on Steel Dynamics, Inc. (STLD) by Gregg Jahnke in February 2025, which highlighted the company’s operational efficiency, superior scrap acquisition, and strategic growth initiatives. The company’s stock price has appreciated approximately by 9.19% since our coverage. The thesis still stands as STLD benefits from scale and long-term resilience. JiM shares a similar perspective but emphasizes Algoma Steel’s Canadian industrial platform, domestic infrastructure catalysts, and replacement-cost value.

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Disclosure: None.