Algoma Steel Group Inc (ASTL.TO) Buy, Sell or…

Algoma Steel Group Inc (ASTL.TO)

6.19

+0.34 (5.81%)

as of Oct 2, 2026, 8:00:00 pm Market Open.

88 watching

WAIT

Buying back $200 million of its stock via a Dutch auction. Great under valued asset play. Have their cost structure under control. Paying down their debt and returning cash to shareholders. Wait for the auction to finish when there may be a bit of a dip.

HOLD

They have a lot of cash and there is speculation that they will have a very big distribution. Earnings are lower this year than they where last year. Would prefer it in the lower $30’s.

SELL

Steel pricing continues to remain strong which indicates that either 1) things are going to continue to be good or 2) the market is saying things are going to start slowing down and steel will catch up on the downside. He would take some profits as it is probably up on speculation.

DON'T BUY

Doing a share buyback. Not his top pick among the steel companies. This is a company that has gone through 2 or 3 resurrections. Expects the market for steel will be cooling off probably in 2007/2008.

BUY

Still prices continue to rise. There will be some Chinese dumping issues going on which will put a little bit of pressure on them. Right now they are generating free cash flow yield in the 9% range.

BUY

Has gone up in the last 2 days because of their announcement of buying back stock starting in the next quarter. The price for their type of steel “high roll” is going up. Not a bad buy.

BUY

Steel is starting to look a little bit better again. He is worried about the whole global economy. China is tightening money to help control growth. Steel could be a casualty, but for now, with all the corporate activity, prices are starting to move higher again.

DON'T BUY

Has always been a tricky investment. Has gone bankrupt a couple of times. This time it has done very well. A cyclical so when it is doing extremely well, it is probably time to let it go.

SELL

It's a bit rich. The numbers are weaker then they were in prior years. Imports are not here so the market is stable. They are generating good earnings for the short term, but concerned that they are getting later on in the cycle.

HOLD

Moved up a little bit in the shadow of Dofasco (DFS-T). A US hedge fund has asked for a special meeting to get them to pay out their big wad of cash as a special dividend. Algoma is resisting but will probably pay out something.

PAST TOP PICK

(A Top Pick Sept 12/05. Up 1%.) It now has a US hedge fund shareholder that's calling a vote here to pay a special dividend. Very cheap, but feels the upside is only to $27/28.

DON'T BUY

Steel is not doing as well as it was. US Hedge fund wants them to pay out the excess money they made in the form of a special dividend. Doubtful if this will happen.

BUY

Steel prices look like they're moving up a little bit in the 4th quarter and probably by the end of the year they'll be almost $10 in cash again. Thinks there's one last run in it just on valuation up to the mid to high $20's.

DON'T BUY

Buying back shares and paying special dividends which is stupid as they will need that extra cash in the next down cycle of steel. A very cyclical business. Steel prices have weakened and if we have a recession in the US there will be a dampening of steel demand.

TOP PICK

Paid a $6 special dividend last month which is why it is down. In the $22/23 range, you have about $11 a share in cash and it looks like steel prices are turning around a little bit. They could probably earn in the $3.50 range next year with current steel prices.Only trades at 3/4 X earnings if you ex the cash. Extremely cheap.

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Algoma Steel Group Inc (ASTL.TO)