Opinions Gavin Graham
ArcelorMittalMTDON'T BUYSep 09, 2011
Downside is still here because steel is a major factor in economic growth. Dividend is giving some support but could be cut or eliminated completely. Won’t go up any time soon.
Gavin GrahamUnknown
$17.76
Stock price when the opinion was issued
$67.25
As of Jul 14, 2026. Market Open.
steel
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It is mostly a European steel producer and is tied to steel prices. The question is will steel prices keep going higher. This can be affected by the Russian/Ukraine conflict. Also it is very exposed to appliances and autos and a bit to construction. The appliances and auto sectors are held up by the semi shortage so it is in the 'too hard to understand pile'.
steel
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Premium contentTOP PICK
DON'T BUY
Steel companies are really under the gun right now. Demand has slowed. There is a glut of supply and prices are falling very quickly. This company has a very high debt to cash flow ratio. It is very important to look at the leverage that they have. He owns a couple of their bonds, short dated ones. He prefers their debt because it ranks higher than their equity and doesn’t suffer if they cut the dividend.
David DriscollOwned
steel
COMMENT
Largest steel maker globally. Like all the steel stocks it has been beaten down. Steel is the major industrial sensitive area. If you think the Chinese are going to re-stimulate their economy, there will be demand for its products. Entirely a macro economic call, and nothing to do with the company.
steel
BUY
Steel stocks were amongst the very worst performing last year. Probably a good opportunity here where good quality steel companies are trading as low as 4X cash flow. Because of high fixed costs, they will never command huge multiples. If you own, there will probably be a holding period of about 2 years with a fair amount of volatility.
steel
COMMENT
When you are looking at these big steel companies, you are looking at the Asian recoveries and do you buy or not? While Asia may not grow at the same rate that it has been growing at, but he thinks the fundamental story still holds. He would be more of a trader than an investor for the long pull.
steel
