When one analyst turns positive on a stock, TheStreet's Jim Cramer says he takes interest. When a second one goes positive, he really listens up.
Well, add a third one to the mix, as analysts at Deutsche Bank upgrade U.S. Steel (X) - Get Report and AK Steel (AKS) - Get Report from hold to buy, Cramer, the manager of the Action Alerts PLUS charitable trust portfolio, pointed out on CNBC's "Stop Trading" segment.
Both stocks are up about 4.5% Friday.
Deutsche Bank's recent move echoes similar actions taken this week, after analysts at Longbow Research called for up to 50% upside in certain steel stocks, (here's the more in-depth report on those actions).
Investors are starting to pile into these stocks on the hope that the U.S. government intervenes in the steel market. Specifically, they are looking at Section 232 in an effort to block steel imports, Cramer explained.
This would tighten up steel supplies, driving up the commodity's price. The president can make the case that it's important to preserve the steel industry for the defense industry. It's quite likely these actions will receive political pushback, but because of it touching on a matter of national security, there's not much Congress can do but protest.
These companies need some sort of catalyst like this, Cramer reasoned. While this would be a "real stretch" by President Trump, it would benefit steel companies.
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At the time of publication, Cramer's Action Alerts PLUS had no position in any companies mentioned.