Commodities & Metals

Can the Metals Stocks Escape the Alcoa Black Hole?

Nucor Corp. (NYSE: NUE) is one of the most advanced metals players in America, and it was down only 0.1% at $53.35, with a $16 billion market cap. Nucor has a consensus target price of $58.50 and a 52-week trading range of $46.10 to $62.31. It is valued at about 13 times forward earnings, but they are declining along with sales.

Steel Dynamics Inc. (NASDAQ: STLD) still has a positive expectation by analysts, but the 0.6% drop to $32.83 on Thursday was against a 52-week range of $25.03 to $39.35. The consensus target price is $36.17, the market cap is $7 billion, and its valuation is just over 10 times future earnings sales, which are in decline.

Schnitzer Steel Industries Inc. (NASDAQ: SCHN) was down only one cent at $20.78 right before the closing bell. It has a market cap of less than $600 million now, and its consensus target price is $20.50. The 52-week trading range is $18.68 to $27.47. It is now worth just one-third of its value back in 2011. The future valuation is about 13 times next year’s earnings estimates, but it is also expected to have a revenue gain.

Reliance Steel & Aluminum Co. (NYSE: RS) was down 0.7% at $120.48 on Thursday, with an $8 billion market cap after its shares surged higher in 2019. The consensus target price is $119.22, and the 52-week trading range is $75.22 to $122.17.

Century Aluminum Co. (NASDAQ: CENX) traded down by 6.4% at $7.24 on Thursday, without much of a volume spike at all. Century has a market cap of $644 million. It has a consensus target price of $9.67 and a 52-week trading range of $5.02 to $9.98. It was more than a $25 stock as recently as 2014.

Allegheny Technologies Inc. (NYSE: ATI) produces high-performance materials such as titanium and titanium-based alloys, nickel-based alloys, cobalt-based alloys, zirconium and other alloys. The shares were last seen down just 0.4% at $18.81, and its market cap is close to $2.4 billion. The consensus analyst target is $23.78, and the 52-week trading range is $17.03 to $29.50.

Tronox Holdings PLC (NYSE: TROX) is also into titanium ores and other material, and its shares were down 1.5% at $11.81, with a $1.7 billion market cap. Shares are down from a 52-week high of $15.0 and under its consensus analyst target price of $15.22, but they are also way up from a recent low of $6.71. Tronox currently has a 1.6% dividend yield.

Arconic Inc. (NYSE: ARNC), which used to be part of Alcoa before a breakup of the company, ironically was trading up 2.3% at $29.87 late on Thursday. Its 52-week range is $16.12 to $31.99, and its consensus target price is $35.50. Arconic reports earnings at the end of the month and has a market cap of close to $13 billion, now that its shares have nearly doubled from its recent lows.

The good news in metals is that many of these stocks already have been battered over 2019 or in prior years. There are many instances in which the companies are grouped together, rightfully or not, and that seems to happen when there is bad news in particular.

It really does seem unfair to just tie together an entire group of companies when they may have different industry trends. That said, Wall Street tries to identify patterns and place its bets accordingly. The mentality rules that if there is smoke, there must be fire too.