Nordstern Capital, an investment management company, released its first quarter 2023 investor letter. A copy of the same can be downloaded here. The firm believes that a long-term mindset and short-term cash flows will help to sustain in the current environment of risk and potential black swans. You can check the top 5 holdings of the fund to know its best picks in 2023.
Nordstern Capital highlighted stocks like Algoma Steel Group Inc. (NASDAQ:ASTL) in the first quarter 2023 investor letter. Headquartered in Sault Ste. Marie, Canada, Algoma Steel Group Inc. (NASDAQ:ASTL) produces and sells steel products. On June 8, 2023, Algoma Steel Group Inc. (NASDAQ:ASTL) stock closed at $7.80 per share. One-month return of Algoma Steel Group Inc. (NASDAQ:ASTL) was 9.55%, and its shares lost 9.30% of their value over the last 52 weeks. Algoma Steel Group Inc. (NASDAQ:ASTL) has a market capitalization of $815.708 million.
Nordstern Capital made the following comment about Algoma Steel Group Inc. (NASDAQ:ASTL) in its Q1 2023 investor letter:
“Algoma Steel Group Inc. (NASDAQ:ASTL): (ASTL, share price increased + 28% in 1Q 2023)
“The Infrastructure Investment Act, the Inflation Reduction Act and the Chips Act provide a combined $975bn funding […] an estimated 5m tons of steel is needed for every $100bn in infrastructure spending. […] on top of that we expect […] 2m to 3m tons of annual steel demand for wind, solar and transmission projects.” – Leon Topalian, CEO Nucor Corporation
Hot-Rolled Coil (HRC) steel prices have rallied from $700 per ton at the beginning of this year to currently around $1,000. In April, steel giant Cleveland Cliffs raised HRC prices to $1,3004 . However, the shares of most steel companies do not reflect an elevated steel price environment. In fact, Algoma Steel’s CFO Rajat Marwah believes that HRC prices might drop again. He expects mid-cycle prices of $900, which should enable ASTL to generate $250m to $300m in annual free cash flow (less than 3-times ASTL’s current enterprise value) once the EAF project is finished and stabilized…” (Click here to read the full text)
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Algoma Steel Group Inc. (NASDAQ:ASTL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held Algoma Steel Group Inc. (NASDAQ:ASTL) at the end of first quarter 2023 which was 34 in the previous quarter.
We discussed Algoma Steel Group Inc. (NASDAQ:ASTL) in another article and shared the list of best small-cap value stocks to invest in. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
