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Why United States Steel Corporation (X) Shares Fell 10%

Shares of United States Steel Corporation (NYSE:X) declined almost 10% on Wednesday as traders basically sold off anything related to iron after the spot price of 62% fines iron ore dropped the most in almost a year. Although lower iron ore prices isn’t necessarily a bad thing for U.S. Steel, the softer price indicates less confidence in China, whose demand for steel could negatively affect United States Steel Corporation (NYSE:X) profits. Moreover, softer iron ore prices mean a pause/reversal in the Trump trade, a factor which could hurt sentiment in the steel sector.

Shares of United States Steel Corporation (NYSE:X) could also be down due to the news of a chemical spill in the company’s Indiana facility. Apparently an unknown amount of liquid containing hexavalent chromium leaked within 100 yards of a lake. So far though, the likely impact looks contained at the moment as EPA sampling has not shown any evidence that the carcinogenic chemical has entered the lake.

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

Smart money sentiment for United States Steel was stable in Q4. 35 top funds had a bullish position in United States Steel Corporation (NYSE:X) at the end of the fourth quarter, unchanged from that of the previous quarter. In terms of individual movements, Jim Simons‘ Renaissance Technologies upped its holding by 69% quarter-over-quarter to 5.655 million shares at the end of December.

The Bottom Line

United States Steel Corporation (NYSE:X) shares have fallen in reaction to the decline in the price of iron ore. For more reading, check out ‘8 Countries That Produce The Most Steel In the World‘.

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