Just as the market seemed to be stabilizing after the recent correction, plans to impose import tariffs on steel and aluminum have pushed them back inTO turmoil. The market experienceD a minor sell-off as investors assessed the possibility of a trade war that would ensue should US trade partners chose to retaliate. If you open any standard economics book, you would find out that tariffs lead a decrease in welfare of the consumers. The loss in consumer surplus is divided into three categories: the state’s tax revenue, deadweight loss and an increase in producer surplus. The increase in producer surplus is what interests us more in this case and it’s the US steel producers that will reap the benefits of tariffs, should the US administration instate them. So if you want to add one or two steel companies to your portfolio, we recommend that you take into account what companies professional investors were betting on even before tariffs were announced.
Number 5 on our list is Commercial Metals Company (NYSE:CMC), an Irving, Texas-based manufacturer and recycler of steel products. According to Insider Monkey’s database, 20 elite fund managers were invested in this stock at the end of the 2017 fourth quarter, up from 14 recorded at the end of the previous quarter. The largest position was held by Jacob Doft’s Highline Capital Management, which reported ownership of 4.28 million shares in its latest 13F filing. Highline Capital had boosted its stake in Commercial Metals Company (NYSE:CMC) by 49% during the fourth quarter. Billionaire Ken Griffin was also betting on Commercial Metals Company, with Citadel Investment Group reportedly holding 1.96 million shares. Commercial Metals Company (NYSE:CMC) stock has had a great year so far, currently up by 17%. The company is expected to release its next financial report on March 22, with analysts projecting $1.14 billion in revenue and earnings of $0.27 per share.