Nucor is my favorite steel company. It's actually the best steel company in the world. Right now, Wall Street thinks that Nucor can earn about $22 this year. But we'll only earn about $12 next year, with some firms even lower than that.
This is a classic case of the cycle talking. I, on the other hand, believe that Nucor, which is the lowest cost producer, can have another good year. And that puts me at odds with the street. Remember, I think there's secular growth here, not just cyclical.
When the stock ran to the $120s, the temptation was to say, that's it. We just beat this one. We got out. Remember, I told you about that last conference call. I said, we can't be that wrong on Nucor. But then I thought, if I'm right about my view-- and Nucor certainly thinks so, because they bought a ton of stock $6.00 above here-- then I could be leaving as much as $100 on the upside, $100 on the table.
Because that was what I calculated with $22 earnings power for next year. Maybe they do $20. So what did we do? We did nothing. And now we're almost back to where we started. Not tragic, but certainly hindsight says we should have taken the gain.
My inclination-- I don't care where I bought this one. I would buy more. So unless I trade it around a core position, like I like to do, the answer is Nucor is not a mistake. It could end up being fabulous. So the jury's still out on Nucor, because I don't want another Shopify.
Hear Cramer break down his latest thoughts on all of the stocks in his charitable portfolio on Action Alerts PLUS. Recap the September call here.