NEW YORK (TheStreet) -- Where's the love for steel?
ArcelorMittal (MT) and United States Steel (X), 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.
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.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV