This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

One Company Making Profits Out Of Steel

Stocks in this article: FRDIIINMTSYNL

James Dennin, Kapitall: The New York Times published a profile this week about Wolfgang Eder, a former litigator-turned CEO who runs a mid-size Austrian steel company. Despite being relatively small for a commodities manufacturer – its market cap is a little over $7 billion, and despite being something of a mouthful – Voestalpine AG (VIE:VOE) might be a stock worth looking at more closely.

[Read more from Kapitall: 6 Banks Under Fire For Clearing Payday Loans]

That's because the modestly-compensated CEO has turned around the company as well as the local community, at a time when many steel manufacturers are struggling to turn a profit. This is especially true of European manufacturers, where a stalled economic climate at home, coupled with increasing competition from Chinese and Turkish developers have made doing business even more difficult than it already was. Though it is manufactured rather than mined, steel is still viewed by most investors as a raw commodity - meaning that the companies which manufacture them are relatively limited in changes they can make to their company if the price of steel goes down. Being completely dependent on the whims of the market is not an easy place to be if you're expected to raise returns year-in, year-out. But Eder is trying to change that. 

His goal has been to refashion his steel from something people view as simply a raw-good, into a cutting-edge technology that people will see as a way to help them grow their business. It seems like a tall order for a material that was popularized in the late 1850s. However he's had a lot of luck, boosting revenues for his own company by almost 60%. What's the secret to his success? By keeping his company from becoming too big.

By keeping the company small, Voestalpine has been able to maintain focus. This helps on the research-and-development end, Eder has tripled the budget over the last three years, but it also helps the company get better at targeting the right buyers. With steel, that can make a huge difference. This is because while the most common steel parts are relatively cheap ($2-300 per ton), certain kinds of special parts, such as those required by luxury auto-manufacturers, can be much more expensive. By focusing intently on this section of the market, and bolstering their innovation, Voestalpine has been able to boost profits while many giants of the industry, such as Arcelor Mittal (MT) have been struggling. 

Will smaller commodities manufacturers become the norm? Use the interactive list below to being your own analysis. 

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,614.81 +215.14 1.31%
S&P 500 1,939.71 +35.70 1.88%
NASDAQ 4,413.5190 +97.4450 2.26%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs