Investors reading about the horrors of a possible steel glut should realize there are two types of steel stocks, Jim Cramer said Thursday on
Stop Trading! segment.
A UBS report, warning of flat prices, ignores the fact that commodity steel stocks, like
, typically bear the brunt of gluts, Cramer said. He said investors should instead own shares in well-run specialty steel makers like
( OS) and
In contrast to the glut talk, Cramer said, demand for structural steel is up 9%. "Reliant just said business is great," he said. "
just did a special dividend."
Cramer added that "selling those stocks makes no sense to me," noting that some specialty steel plays are trading at a cheap five or six times earnings. "Sell letter X, that's fine," he said, referring to U.S. Steel. "But don't sell the others."
Cramer also reiterated his bullish take on
, saying it's going to 100 from a recent 77 in large part because of the turnaround led by
( KFT) CEO Irene Rosenfeld. "She is the best in the business," he said.
At the time of publication, Cramer was long Altria.
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