I recently published an investment thesis exclusive to the investment platform, Seeking Alpha, where I will be covering recent and forthcoming initial public offerings (IPOs). The article is on the steel company, Steel Dynamics, Inc. (STLD), whom I have previously covered. From the executive summary of the article is the following:
- I assign Steel Dynamics a Strong Sell rating due to deteriorating economic fundamentals and an unfavorable risk/reward profile.
- ROIC and free cash flow have declined sharply since 2022, signaling worsening profitability and a poor entry point in the capital cycle.
- Tariffs may provide short-term margin expansion, but long-term effects are likely to constrain growth and competitiveness for Steel Dynamics.
- The valuation is unattractive, with downside risk far outweighing upside potential based on realistic cash flow and margin scenarios.
The rest of the article is available here.