ArcelorMittal SA (MT): Today's Featured Basic Materials Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

ArcelorMittal ( MT) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day up 0.3%. By the end of trading, ArcelorMittal fell 29 cents (-1.9%) to $15.26 on average volume. Throughout the day, seven million shares of ArcelorMittal exchanged hands as compared to its average daily volume of 6.9 million shares. The stock ranged in price between $15.17-$15.47 after having opened the day at $15.31 as compared to the previous trading day's close of $15.55. Other companies within the Basic Materials sector that declined today were: ATP Oil & Gas ( ATPG), down 14.6%, Geokinetics ( GOK), down 10.9%, Quaterra Resources ( QMM), down 7.8%, and Timberline Resources Corporation ( TLR), down 7.2%.

ArcelorMittal, together with its subsidiaries, operates as an integrated steel and mining company worldwide. ArcelorMittal has a market cap of $24.8 billion and is part of the metals & mining industry. The company has a P/E ratio of 17.8, below the average metals & mining industry P/E ratio of 114.4 and equal to the S&P 500 P/E ratio of 17.7. Shares are down 12.1% year to date as of the close of trading on Thursday. Currently there are four analysts that rate ArcelorMittal a buy, no analysts rate it a sell, and two rate it a hold.

TheStreet Ratings rates ArcelorMittal as a hold. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

On the positive front, China Shen Zhou Mining & Resources ( SHZ), up 22.6%, China Gengsheng Minerals ( CHGS), up 10.5%, Pacific Ethanol ( PEIX), up 10.4%, and Gold Standard Ventures ( GSV), up 10.3%, were all gainers within the basic materials sector with Cabot Oil & Gas Corporation ( COG) being today's featured basic materials sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).
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