Opinions
Paul Harris, CFA
ArcelorMittal
MT-N
DON'T BUY
May 05, 2016
$5.310
Stock price when the opinion was issued
steel
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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.
steel
WAIT
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
(Market Call Minute.) One of the largest steel companies globally. The steel business has had a very tough time and will continue to have that. There is massive overcapacity in China.