United States Steel Corporation Stock Sell Recommendation Reiterated (X)
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- The debt-to-equity ratio of 1.02 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, X maintains a poor quick ratio of 0.90, which illustrates the inability to avoid short-term cash problems.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market, UNITED STATES STEEL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for UNITED STATES STEEL CORP is currently extremely low, coming in at 8.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.90% significantly trails the industry average.
- X's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 25.77%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Despite the weak revenue results, X has outperformed against the industry average of 21.6%. Since the same quarter one year prior, revenues slightly dropped by 8.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
--Written by a member of TheStreet Ratings Staff. Holiday Special: Subscribe to Action Alerts PLUS to see how Jim Cramer trades his $2.5 Million+ portfolio for 51% off the list price. Your first 14-days are FREE: Sign up today to get e-mail alerts before every trade
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