To: voodooist who wrote (23234 ) 5/3/2000 9:28:00 PM From: E.J. Neitz Jr Read Replies (1) | Respond to
Fred--Steel Stocks Require a lot of patience and waiting for a cycle change. Right now they are so far out of favor that "Lenin's bible" would fetch more interest and probably a better price! Anyway, the problem is that although they represent termendous value, so do a lot of industry groups, many with better institutional sponsorship. My investment in BS and LTV centers around the very real prospect for industry consolidation. Both BS and LTV,in my opinion will be acquired, with BS probably the first. Greenway Partners and WHX Corp have taken large positions in BS stock and neither of them are passive investors. At $5 1/2, BS is more than dirt cheap and their financials are sound. LTV on the other hand has lots of hidden assets and from a valuation basis represents extreme value, even more so than Bethlehem.Their financials arn't as strong as Bethlehem's, but there is little financial risk. With the economy strong, and the world economy strengthening, the cycle will be changing for both companies. Merrill Lynch has done a lot of valuation analysis on LTV and now rate the stock a buy. They also have X a buy and the dividend is certainly attractive. Nucor, while having a better "story" because they don't have the investment expense of the integrated producers, in my opinion doesn't have the price snap-back potential of LTV or BS. The way I look at it, to get the yield and the price appreciation potential (that one could get with X), I buy the First Australia prime income fund (FAX) yielding 12% with most of my funds and use the yield throw-off to buy LTV and BS!!! But Fred, it could be months before there is any turnaround in BS or LTV or the others. However, it could happen tomorrow. Until then I'll keep buying along with Greenway and WHX.
