U.S. Steel (X) Stock Climbs on Higher Steel Prices

13 July 2016

Shares of U.S. Steel  (X) are gaining 5.52% to $21.11 in early-afternoon trading on Tuesday as steel prices in Shanghai climbed to a 10-week high after Tangshan, a top producing Chinese province, restricted output at steel mills.

Steel reinforcement-bar rose up to 5.5% to 2,563 yuan ($383) per metric ton on the Shanghai Futures Exchange and closed at 2,558 yuan, notching its highest close since April 29, Bloomberg reports.

"Output cuts in Tangshan and low inventories by steel mills suggest the rally in the steel market is not over yet," Wang Yilin, an analyst with Sinosteel Futures, told Reuters. "The high expectation of Chinese easy monetary policy has also promoted funds to move to commodities, particularly, steel futures."

Analysts believe that China's economy will slow further in the second half of 2016, leading the government and central bank to introduce more stimulus measures.

Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.

U.S. Steel's weaknesses include its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.


Source : thestreet.com