12 Steel Stocks You Should Sell Right Now

NEW YORK (TheStreet) -- Steel stocks are suffering this year.

The Market Vectors Steel ETF (SLX) is down 2% for the year, underperforming the broader market. The S&P 500 has gained 2.1% so far this year.

This week, companies like U.S. Steel (X), AK Steel (AKS) and Cliff's Natural Resources (CLF) reported quarterly results that, for the most part, weren't pretty.

U.S. Steel, for instance, reported a quarterly loss and lowered its earnings forecast for 2015. CEO Marion Longhi said in Tuesday's earnings release that the results reflected "extremely challenging market conditions, including the negative impact of the tremendously high levels of imports, which have contributed to reduced volumes and average realized prices."

On AK Steel, which reported a wider loss than a year ago, Barclays' (BCS) analyst Matthew Korn had this to say: "Like its peers AKS still feels heavy pressure from a 'tidal wave' of foreign product that has lifted inventories and depressed spot steel pricing. This is damping AK's sales volumes and led to reduced operating rates, notably at the just-acquired Dearborn plant. It's not clear that these volumes will quickly recover."

TheStreet Ratings, TheStreet's proprietary ratings tool, rates U.S. Steel at a "hold," with a C rating. It rates AK Steel at "sell," with a D+ rating and Cliff's Natural Resources also at "sell," with a D- rating. Here are 10 other steel stocks that TheStreet Ratings rates "sell." And that's just the tip of the iceberg in the troubled steel sector.

TheStreet Ratings projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year. Note: Reports are dated Apr. 26, 2015. Year-to-date returns are based on April 29, 2015 closing prices.

AKS Chart AKS data by YCharts

12. AK Steel Holding Corp. (AKS)
Headquarters: West Chester, Ohio
Market Cap: $894 million
Rating: Sell, D+
Year-to-date return: -15.3%

AK Steel Holding Corporation, through its subsidiary, AK Steel Corporation, produces flat-rolled carbon, stainless and electrical steel, and tubular products in the United States and internationally.

"We rate AK STEEL HOLDING CORP (AKS) a SELL. This is driven by a number of negative factors, 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 deteriorating net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Metals & Mining industry. The net income has significantly decreased by 61.6% when compared to the same quarter one year ago, falling from $35.20 million to $13.50 million.
  • The gross profit margin for AK STEEL HOLDING CORP is currently extremely low, coming in at 10.07%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.67% trails that of the industry average.
  • Net operating cash flow has decreased to $57.80 million or 49.07% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, AK STEEL HOLDING CORP has marginally lower results.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 30.60%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 73.07% 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.
  • 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. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse 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. This year, the market expects an improvement in earnings (-$0.61 versus -$0.74).

 

 

HNH Chart HNH data by YCharts

11. Handy & Harman Ltd. (HNH)
Headquarters: White Plains, N.Y.
Market Cap: $396 million
Rating: Sell, D+
Year-to-date return: -20.2%

Handy & Harman Ltd. manufactures and sells engineered niche industrial products in the United States and internationally. It operates through Joining Materials, Tubing, Building Materials, and Kasco Blades and Route Repair Services segments.

"We rate HANDY & HARMAN LTD (HNH) a SELL. This is driven by a number of negative factors, 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, generally high debt management risk, weak operating cash flow and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HANDY & HARMAN LTD 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, HANDY & HARMAN LTD reported lower earnings of $1.19 versus $2.12 in the prior year.
  • 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 79.2% when compared to the same quarter one year ago, falling from $12.50 million to $2.60 million.
  • The debt-to-equity ratio is very high at 4.12 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, HNH's quick ratio is somewhat strong at 1.18, demonstrating the ability to handle short-term liquidity needs.
  • Net operating cash flow has declined marginally to $27.54 million or 5.68% when compared to the same quarter last year. Despite a decrease in cash flow HANDY & HARMAN LTD is still fairing well by exceeding its industry average cash flow growth rate of -43.35%.
  • The gross profit margin for HANDY & HARMAN LTD is currently lower than what is desirable, coming in at 28.72%. Regardless of HNH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.97% trails the industry average.

 

 

 

CAS Chart CAS data by YCharts

10. A.M. Castle & Co. (CAS)
Headquarters: Fairless Hills, Pa.
Market Cap: $93 million
Rating: Sell, D
Year-to-date return: -50.6%

  1. M. Castle & Co., together with its subsidiaries, operates as a specialty metals and plastics distribution company in the United States, Canada, Mexico, France, the United Kingdom, Spain, China, and Singapore. It operates through two segments, Metals and Plastics.

"We rate CASTLE (A M) & CO (CAS) a SELL. This is driven by a number of negative factors, 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 deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 209.4% when compared to the same quarter one year ago, falling from -$12.63 million to -$39.08 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, CASTLE (A M) & CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CASTLE (A M) & CO is rather low; currently it is at 21.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -16.88% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$30.24 million or 448.31% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 2.06 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, CAS's quick ratio is somewhat strong at 1.46, demonstrating the ability to handle short-term liquidity needs.

CHOP Chart CHOP data by YCharts
9. China Gerui Advanced Materials Group (CHOP)
Headquarters: Zhengzhou, China
Market Cap: $185 million
Rating: Sell, D
Year-to-date return: 64%

China Gerui Advanced Materials Group Limited operates as a contract manufacturer of cold-rolled narrow strip steel products in the People's Republic of China and internationally. The company converts steel manufactured by third parties into thin steel sheets and strips.

"We rate CHINA GERUI ADV MATERIALS GP (CHOP) a SELL. This is driven by some concerns, 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, disappointing return on equity, weak operating cash flow and generally high debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CHINA GERUI ADV MATERIALS GP 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CHINA GERUI ADV MATERIALS GP swung to a loss, reporting -$2.30 versus $4.50 in the prior year.
  • 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 655.5% when compared to the same quarter one year ago, falling from -$4.37 million to -$33.04 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, CHINA GERUI ADV MATERIALS GP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$9.97 million or 228.03% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 60.16%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 700.00% 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.

 

 

SCHN Chart SCHN data by YCharts

8. Schnitzer Steel Industries Inc. (SCHN)
Headquarters: Portland, Ore.
Market Cap: $458 million
Rating: Sell, D
Year-to-date return: -24.2%

Schnitzer Steel Industries, Inc. manufactures and exports recycled ferrous metal products worldwide. The company operates in three segments: Metals Recycling Business (MRB), Auto Parts Business (APB), and Steel Manufacturing Business (SMB).

"We rate SCHNITZER STEEL INDS (SCHN) a SELL. This is driven by some concerns, 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 unimpressive growth in net income, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 11029.8% when compared to the same quarter one year ago, falling from $1.79 million to -$195.64 million.
  • The gross profit margin for SCHNITZER STEEL INDS is currently extremely low, coming in at 11.03%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -44.54% is significantly below that of 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 43.08%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 10442.85% 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.
  • SCHNITZER STEEL INDS 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SCHNITZER STEEL INDS turned its bottom line around by earning $0.20 versus -$10.53 in the prior year. For the next year, the market is expecting a contraction of 330.0% in earnings (-$0.46 versus $0.20).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market, SCHNITZER STEEL INDS's return on equity significantly trails that of both the industry average and the S&P 500.

 

SID Chart SID data by YCharts

7. Companhia Siderurgica Nacional S.A. (SID)
Headquarters: Sao Paulo, Brazil
Market Cap: $3.5 billion
Rating: Sell, D
Year-to-date return: 23.6%

Companhia Siderurgica Nacional operates as an integrated steel producer primarily in Brazil. It operates through five segments: Steel, Mining, Cement, Logistics, and Energy.

"We rate COMPANHIA SIDERURGICA NACION (SID) 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 generally high debt management risk, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio is very high at 5.25 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, COMPANHIA SIDERURGICA NACION underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for COMPANHIA SIDERURGICA NACION is currently lower than what is desirable, coming in at 31.37%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.72% trails that of the industry average.
  • SID's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 44.21%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • COMPANHIA SIDERURGICA NACION reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, COMPANHIA SIDERURGICA NACION swung to a loss, reporting -$0.02 versus $0.15 in the prior year. For the next year, the market is expecting a contraction of 4200.0% in earnings (-$0.86 versus -$0.02).

 

 

 

SUTR Chart SUTR data by YCharts

6. Sutor Technology Group Ltd. (SUTR)
Headquarters: Changshu, China
Market Cap: $32 million
Rating: Sell, D
Year-to-date return: 54%

Sutor Technology Group Limited, through its subsidiaries, manufactures and sells finished steel products in the People's Republic of China. The company operates through four segments: Changshu Huaye, Jiangsu Cold-Rolled, Ningbo Zhehua, and Sutor Technology.

"We rate SUTOR TECHNOLOGY GROUP LTD (SUTR) a SELL. This is driven by some concerns, 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, disappointing return on equity, poor profit margins and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SUTOR TECHNOLOGY GROUP LTD 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, SUTOR TECHNOLOGY GROUP LTD reported lower earnings of $0.18 versus $0.43 in the prior year.
  • 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 99.6% when compared to the same quarter one year ago, falling from $6.40 million to $0.03 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, SUTOR TECHNOLOGY GROUP LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for SUTOR TECHNOLOGY GROUP LTD is currently extremely low, coming in at 8.41%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.03% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to -$16.83 million or 656.88% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

 

VALE Chart VALE data by YCharts

5. Vale S.A. (VALE)
Headquarters: Rio de Janeiro, Brazil
Market Cap: $37.4 billion
Rating: Sell, D
Year-to-date return: -11.2%

Vale S.A., together with its subsidiaries, engages in the research, production, and sale of iron ore and pellets, nickel, fertilizer, copper, coal, manganese, ferroalloys, cobalt, platinum group metals, and precious metals in Brazil and internationally.

"We rate VALE SA (VALE) a SELL. This is driven by a few notable 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. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • VALE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 47.61%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, VALE is still more expensive than most of the other companies in its industry.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, VALE SA underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • VALE SA 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, VALE SA increased its bottom line by earning $0.13 versus $0.01 in the prior year. For the next year, the market is expecting a contraction of 107.7% in earnings (-$0.01 versus $0.13).
  • VALE's debt-to-equity ratio of 0.67 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.85 is weak.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 18.8%. Since the same quarter one year prior, revenues fell by 15.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

 

 

 

WLT Chart WLT data by YCharts

4. Walter Energy Inc. (WLT)
Headquarters: Birmingham, Ala./Vancouver, Canada
Market Cap: $38 million
Rating: Sell, D
Year-to-date return: -61.6%

Walter Energy, Inc. produces and exports metallurgical coal for the steel industry. It operates through two segments, U.S. Operations, and Canadian and U.K. Operations.

"We rate WALTER ENERGY INC (WLT) a SELL. This is driven by multiple 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 disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, WALTER ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$118.92 million or 801.58% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • WLT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 92.03%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • The debt-to-equity ratio is very high at 11.14 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, WLT has managed to keep a strong quick ratio of 1.63, which demonstrates the ability to cover short-term cash needs.
  • WLT, with its decline in revenue, underperformed when compared the industry average of 18.8%. Since the same quarter one year prior, revenues fell by 39.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

 

ZEUS Chart ZEUS data by YCharts


3.
Olympic Steel Inc. (ZEUS)
Headquarters: Bedford Heights, Ohio
Market Cap: $120 million
Rating: Sell, D
Year-to-date return: -38.4%

Olympic Steel, Inc. processes and distributes metal products in the United States, Canada, Puerto Rico, Mexico, and internationally. It operates in two segments, Flat Products, and Tubular and Pipe Products.

"We rate OLYMPIC STEEL INC (ZEUS) 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 deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 1845.8% when compared to the same quarter one year ago, falling from -$1.38 million to -$26.89 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, OLYMPIC STEEL INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for OLYMPIC STEEL INC is rather low; currently it is at 17.86%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.23% is significantly below that of 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 57.78%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1916.66% 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.
  • OLYMPIC STEEL INC 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, OLYMPIC STEEL INC swung to a loss, reporting -$1.71 versus $0.70 in the prior year. This year, the market expects an improvement in earnings (-$0.41 versus -$1.71).

 

 

CLF Chart CLF data by YCharts

2. Cliffs Natural Resources Inc. (CLF)
Headquarters: Cleveland, Ohio
Market Cap: $829.2 million
Rating: Sell, D-
Year-to-date return: -24.2%

Cliffs Natural Resources Inc., a mining and natural resources company, produces iron ore and metallurgical coal.

"We rate CLIFFS NATURAL RESOURCES INC (CLF) a SELL. This is driven by multiple 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 deteriorating net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 3068.1% when compared to the same quarter one year ago, falling from $43.30 million to -$1,285.20 million.
  • Net operating cash flow has decreased to $254.90 million or 44.58% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CLIFFS NATURAL RESOURCES INC has marginally lower results.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 69.61%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 4340.00% 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.
  • CLIFFS NATURAL RESOURCES INC 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. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CLIFFS NATURAL RESOURCES INC swung to a loss, reporting -$47.52 versus $2.33 in the prior year. This year, the market expects an improvement in earnings (-$0.46 versus -$47.52).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 18.8%. Since the same quarter one year prior, revenues fell by 15.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

 

GSI Chart GSI data by YCharts

1. General Steel Holdings (GSI)
Headquarters: Beijing, China
Market Cap: $60.1 million
Rating: Sell, E+
Year-to-date return: 47%

General Steel Holdings, Inc., through its subsidiaries, manufactures and sells steel products in the People's Republic of China.

"We rate GENERAL STEEL HOLDINGS INC (GSI) a SELL. This is based on some significant below-par investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The area that we feel has been the company's primary weakness has been its generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • This stock's share value has moved by only 11.51% over the past year. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • GENERAL STEEL HOLDINGS INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, GENERAL STEEL HOLDINGS INC reported poor results of -$0.88 versus -$0.59 in the prior year.
  • Despite the weak revenue results, GSI has outperformed against the industry average of 18.8%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has significantly increased by 153.51% to $95.25 million when compared to the same quarter last year. In addition, GENERAL STEEL HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of -43.35%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 9266.7% when compared to the same quarter one year prior, rising from -$0.10 million to $9.35 million.

 

 

 

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