Thinking about investing in steel? Need a little investing advice?
You're in luck. Jim Cramer, TheStreet's founder and ActionAlertsPlus portfolio manager, has some investing advice when it comes to investing in the alloy of carbon and iron.
On TheStreet's daily Cramer Live show, he was asked about his article: Jim Cramer: Why You Should Buy Nucor Right Now. Cramer broke down the first thing all investors need to know before they invest in steel.
"Well, first you want to analyze whether the dividend is safe. Nucor has remarkable cash flow, okay? Remarkable. Second, you want to be sure that you're not just hot rolled steel. That's the old commodity steel that tends to not have a lot of value. You want to be in higher-value steel, which Nucor has done and then you want to see whether they close capacity so they can't take advantage of the price increases or added capacity. Nucor added capacity. They played this thing like a fiddle, except for they didn't see the bulging inventories that would come," explained Cramer.