Steel Stocks Are a Steal Now

Updated from 7:07 a.m. EDT

By Stockpickr Guest Columnist Doug Hall

Stock selection requires an investor to consider quantitative and qualitative factors. That is, you analyze a company's numbers, and then you interpret what those numbers and other pertinent information mean for the stock.

Take steel companies, for example.

Investors have been pummeled for the last two months as stocks for Steel Dynamics(STLD Quote - Cramer on STLD - Stock Picks), Nucor(NUE Quote - Cramer on NUE - Stock Picks), U.S. Steel(X Quote - Cramer on X - Stock Picks), AK Steel Holding(AKS Quote - Cramer on AKS - Stock Picks), Reliance Steel & Aluminum(RS Quote - Cramer on RS - Stock Picks) and Schnitzer Steel(SCHN Quote - Cramer on SCHN - Stock Picks) have dropped almost 50% since their peaks in midsummer. These companies aren't serving identical markets, but all produce steel -- some from scrap, some from ore. Their futures are closely tied together.

Consider that all of these companies have reported annual growth ranging from 14% to 48% over the last five years. But selling for seven to 11.5 times trailing earnings, their current prices reflect growth rates of 1% to 5%. That just doesn't seem right.

To read more and find out how to play these steel companies, please click here.