8. South Korea's Posco (PKX) is the world's third-largest steel company generating around 70% sales in South Korea, home for Hyundai Motors and Kia Motors.
Posco's stock underperformed peers, declining around 19% during 2010. The hike in iron ore and coking coal prices has impacted the company's earnings as Posco could not pass on increased raw material costs to customers, despite higher steel prices during the year. Consequently, third-quarter earnings were lower than expected, requiring a 7% downward revision in full-year profit.
During 2011, rebound in China's steel demand will benefit Posco, compared to other international steel producers. Analysts expect the stock to gain 37% with a consensus 12-month target price of $146.
In comparison, steel majors, U.S. Steel (X), A.K. Steel (AKS), Nucor (NUE), Steel Dynamics (STLD), Schnitzer Steel (SCHN), and ArcelorMittal (MT) have an upside potential of around 6%, 19%, 8%, 16%, -8%, and 30%, respectively.