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Bargain Shopping in the Steel (Industry) Bin

NEW YORK (TheStreet) -- Where's the love for steel?

ArcelorMittal (MT) and United States Steel (X - Get Report), two of the largest steel manufacturers in the world, are trading below levels seen during the Great Recession, despite steady, if unspectacular, growth in the global economy and demand for steel that's projected to increase 3.1% this year, according to the World Steel Association, an industry trade group that represents steel producers.

American depositary receipts of ArcelorMittal were recently trading at $15.14, down 15%l year to date, compared with a 6.1% rise for the S&P 500 Index.

U.S. Steel's shares were trading at $25.90, down 12% for the year.

Steel companies at the end of 2007 had an average price-to-book ratio of 4.1 (Price to book measures a company's stock price to its book value, or assets minus liabilities and intangible assets.)

ArcelorMittal, the world's largest steelmaker, trades at book value of 0.55. That means that its assets and liquidation price are worth almost double what investors are paying for the stock.

Furthermore, ArcelorMittal's PEG ratio (price-to-earnings ratio divided by projected earnings growth rate) stands at 0.37, compared with the steel industry average of 1.07.

U.S. Steel, meanwhile, trades at 0.99 price to book.

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