Trade-Ideas: Steel Dynamics (STLD) Is Today's Post-Market Leader Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Steel Dynamics ( STLD) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Steel Dynamics as such a stock due to the following factors:

  • STLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $76.3 million.
  • STLD is up 2% today from today's close.

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More details on STLD:

Steel Dynamics, Inc., together with its subsidiaries, manufactures and sells steel products, processes and sells recycled ferrous and nonferrous metals, and fabricates and sells steel joist and decking products in the United States and internationally. The stock currently has a dividend yield of 1.9%. STLD has a PE ratio of 24.5. Currently there are 11 analysts that rate Steel Dynamics a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Steel Dynamics has been 3.6 million shares per day over the past 30 days. Steel Dynamics has a market cap of $5.7 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.96 and a short float of 3.3% with 1.76 days to cover. Shares are up 21.1% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Steel Dynamics as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.6%. Since the same quarter one year prior, revenues rose by 14.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 138.46% and other important driving factors, this stock has surged by 41.79% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • STEEL DYNAMICS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, STEEL DYNAMICS INC increased its bottom line by earning $0.83 versus $0.73 in the prior year. This year, the market expects an improvement in earnings ($1.20 versus $0.83).
  • Net operating cash flow has significantly increased by 132.35% to $76.01 million when compared to the same quarter last year. In addition, STEEL DYNAMICS INC has also vastly surpassed the industry average cash flow growth rate of -10.41%.
  • STLD's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that STLD's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.78 is high and demonstrates strong liquidity.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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