Simple Note on Why CLF is at the Perfect Cross Section of Where the Market Wants to Invest
- It is a meme stock that has barely even memed so far
- 6% GDP Growth + international demand – starving for steel.
- It is a value stock – market fleeing to value
- It is a commodity stock – market wants an inflation hedge
- It is a steel stock: we can’t just ramp up new steel plants willy nilly.
- They are going to make a bucket of money – for sure this year and a strong market for at least 3-5 years in my opinion.
- They are protected by steel tariffs that aren’t going away.
- China wants to go green, and reducing their dirty cheap steel production is one of the best ways for them to accomplish this
- They are a PRIMARY PRODUCER of steel which is vital to our national interests. They aren’t just melting scrap.
- They are FULLY INTEGRATED producing all of their own Iron for their steel mills. They even have a cutting hedge HBI plant (produces things that other steel makers need and for themselves. super high value)
- Their CEO is a fucking badass who hates shorts: https://www.youtube.com/watch?v=kcagi2icXaU
- The stock is undervalued because they have only had ONE QUARTER as a newly combined entity. Institutions will wait for things to get proven out before they fully invest. They bought AK Steel and Mittal Steel’s U.S. operations in 2020 – amazing timing. #1 steel producer in the USA.
- I am comfortable holding shares for 10 years. I don’t care if it doesn’t rip. If the stock Memes it is merely a bonus for me and faster time to value. I see this as very limited downside and massive upside.
Thank you. I know there is a lot more detailed DD. But this post is about discussion and pulling together some interesting factors that might not be together.
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June 11, 2021 at 10:39AM