Dividend.com: Schnitzer Steel Shines

Schnitzer Steel Shares Rise, Defying Goldman Downgrade

Steel-maker Schnitzer Steel Industries (SCHN Quote), was downgraded Monday by a Goldman Sachs analyst, but its shares still rose more than 5% in early trading.

The Portland, Oregon-based company was downgraded by Goldman Sachs to "Sell" from "Neutral." Goldman said it sees the company as overvalued compared to its peers, and expects lower scrap steel prices in June to affect its bottom line.

Goldman also set a price target of $38 for the stock.

The downgrade didn't seem to shake investor confidence in the shares, however. Schnitzer's stock rose $2.51, or +4.6%, in morning trading Monday, despite the downgrade.

We had removed shares of SCHN from our "Recommended" list on July 24, when the stock was trading at $79.57. The company has a .13% dividend yield, based on Friday's closing stock price of $54.54.

The stock has technical support in the $42-$46 price area. If the shares can continue to fly in the face of downgrades, we see the next level of overhead resistance in the $58-66 price area. Despite the recent spike, we would remain on the sidelines. We prefer shares of Nucor (NUE Quote) and U.S. Steel (X Quote) for exposure in the steel sector.

Schnitzer Steel Industries is not recommended at this time, holding a Dividend.com DARS Rating of 3.3 out of 5 stars.

Illinois Tool Works Upgraded by Credit Suisse

In one of several analyst upgrades Monday morning, industrial equipment maker Illinois Tool Works (ITW Quote) was upgraded by Credit Suisse.

Credit Suisse analyst Jamie Cook increased her rating on ITW to "Outperform" from "Neutral," citing an attractive entry point as the stock looks well-positioned for a recovery and possible acquisitions.