NEW YORK (TheStreet) -- Shares of AK Steel (AKS) - Get Report were gaining 7.6% to $3.12 Wednesday following a report that a group of U.S. steelmakers asked the government to impose tariffs on steel shipments from eight countries.
The petition asks the U.S. government to impose tariffs on steel shipments from Brazil, China, India, Japan, South Korea, Netherlands, Russia, and the U.K. on claims that each dumped cold-rolled steel (sold the steel at unfair prices) in the U.S., according to The Wall Street Journal.
The petition also claims that Brazil, China, India, South Korea, and Russia illegally subsidized steelmakers.
U.S. steel makers filed the petition as the industry is trying to deal with record imports, according to the Journal.
AK Steel is among the companies that filed the petition. ArcelorMittal (MT) - Get Report, Nucor (NUE) - Get Report, SteelDynamics (STLD) - Get Report, and U.S. Steel (X) - Get Report are also part of the group that filed the request and said imports have hurt their businesses.
TheStreet Ratings team rates AK STEEL HOLDING CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate AK STEEL HOLDING CORP (AKS) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- AK STEEL HOLDING CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, AK STEEL HOLDING CORP reported poor results of -$0.74 versus -$0.34 in the prior year. For the next year, the market is expecting a contraction of 18.2% in earnings (-$0.88 versus -$0.74).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 255.7% when compared to the same quarter one year ago, falling from -$86.10 million to -$306.30 million.
- The gross profit margin for AK STEEL HOLDING CORP is currently extremely low, coming in at 9.05%. Regardless of AKS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AKS's net profit margin of -17.49% significantly underperformed when compared to the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 70.58%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 173.01% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Net operating cash flow has significantly increased by 97.84% to -$2.70 million when compared to the same quarter last year. In addition, AK STEEL HOLDING CORP has also vastly surpassed the industry average cash flow growth rate of -53.97%.
- You can view the full analysis from the report here: AKS Ratings Report