New Dow Component?

Discussion in 'Stocks' started by gbakker, May 24, 2007.

  1. gbakker


    Often when the Thomson database is updated, you see a reaction in some stocks, depending on the higher or lower EPS estimates. Several information providers over the world use these data as input. You can even do arbitrage on this earnings (together with NAV for instance).

    A stock definately worth considering buying is ArcelorMittal (symbol: MT). This stock trades only at 4xEPS over NAV, compared to 8xEPS over NAV for the sector. Even the large steel-companies trade at 7/8x EPS over NAV. It's the largest steel company of the world and also of the United States. It trades at only 7,5 times EPS (without NAV).

    It's twice as big as Alcoa or Alcan. It's cheaper than both of them. This stock should be a dow component and maybe can be one if it starts a buyout of Alcoa (after the bid for Alcan was rejected). Maybe Alcoa can do a reverse takeover.

    Lot's of analist give this stock a strong buy... Start buying before the hedgefunds come in. Secret of this story: Analist-estimates are not yet available at yahoo and maybe also not at Thomson for the Mittal ADR.

    Good Luck
  2. A little late to the name huh?
  3. Tuke


  4. gbakker


    No, I see still higher steelprices and the merger with Arcelor can improve EPS from 5 eur to 6 eur..

    So sector-neutral valuation is about 87$ per share, compared to 57 now based on EPS 5 eur.

    Check the fundamentals yourself. It has also a good exposure to the expanding country of Germany and no risk like TX (which is partly based in Venezuela)
  5. Tuke


    At least we know it's not a spammer. I'm gonna put it on my watch list.
  6. gbakker


    The only thing I can imagine that this stock isn't gonna be a buyout target is it's value: 80 billion dollars!

    ... and it's daily volume is only a couple of million stocks a day.. That's realy LOL
  7. Div_Arb


    This stock keeps showing up on an earnings yield screen that I do. I should have bought it 6 months ago when it first started to screen well! ADRs are never DOW components, so that's not gonna happen. Unless, someone gets the law changed to allow Schwartzenegger to run for president! MT is based in the Netherlands, so take a toke and buy some, man! Might I suggest a June 60 buy-write for your trading pleasure.