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 down 1.2%. By the end of trading, ArcelorMittal fell 31 cents (-1.9%) to $16.17 on average volume. Throughout the day, 7.9 million shares of ArcelorMittal exchanged hands as compared to its average daily volume of 8.5 million shares. The stock ranged in price between $16.08-$16.50 after having opened the day at $16.45 as compared to the previous trading day's close of $16.48. Other companies within the Basic Materials sector that declined today were: Endeavour International ( END), down 14.1%, Cardero Resources Corporation ( CDY), down 9.9%, Almaden Minerals ( AAU), down 9.1%, and Quicksilver Resources ( KWK), down 8.4%.
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ArcelorMittal, together with its subsidiaries, operates as an integrated steel and mining company with presence in 60 countries worldwide. ArcelorMittal has a market cap of $25.74 billion and is part of the metals & mining industry. The company has a P/E ratio of 18.5, above the S&P 500 P/E ratio of 17.7. Shares are down 4.9% 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 three rate it a hold.

TheStreet Ratings rates ArcelorMittal as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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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