Prospects for basic industries like steel look good amid massive planned U.S. infrastructure upgrades. There are clouds of uncertainty though, like higher inflation and the possibility of a Russian invasion of Ukraine. Meanwhile, the Relative Strength (RS) Rating for United States Steel shot up to 78 Wednesday, from just 62 the day before. U.S. Steel shares slid 0.5% in Wednesday afternoon trading.
The RS Rating upgrade reflects strong profit and sales performance. And it shows significant improvement. But it's still a bit shy of the ideal CAN SLIM investors look for. Top stocks often have an RS Rating of over 80 as they begin their biggest price moves. See if U.S. Steel stock can continue to rebound and clear that threshold.
U.S. Steel Fundamentals Strong
IBD's proprietary Relative Strength Rating tracks price performance with a 1 (worst) to 99 (best) score. The score shows how a stock's price behavior over the last 52 weeks compares to all the other stocks in our database.
Among its other key ratings, U.S. Steel stock has an 84 Composite Rating, putting it in the top 12% of all stocks overall. Its 70 EPS Rating is OK and is likely to rise on recent robust profit growth. However, its A SMR Rating (sales+profit margins+return on equity), on an A to E scale with A tops, is outstanding.
In terms of fundamentals, last quarter sales grew 119% to $5.62 billion, continuing a string of bullish sales reports. The prior three periods the company's sales rose 33%, 140% and then 155%. Earnings have been on a similar escalator-up trend. In its most recent quarter U.S. Steel's earnings soared about 1,600% year over year, from 22 cents a share to $3.75 per share.
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U.S. Steel stock is working on a consolidation with a 28.46 buy point. See if it can clear the breakout price in volume at least 40% higher than normal.
U.S. Steel stock earns the No. 7 rank among its peers in the Steel-Producers industry group. Grupo Simec and Steel Dynamics are also among the group's highest-rated stocks.
