Fifty years ago, Lakshmi Mittal built an empire one broken steel mill at a time... He knew that the world's steel business sat old, fragmented, and tired. Mittal saw an industry waiting for someone to revive it.
One Man Built a Steel Empire From Scraps
By John Evelius, junior analyst, Chaikin Analytics
Fifty years ago, Lakshmi Mittal built an empire one broken steel mill at a time...
He knew that the world's steel business sat old, fragmented, and tired. Mittal saw an industry waiting for someone to revive it.
So he set out hunting for mines no one else would touch.
He found money-losing mines and government-owned plants in remote, ignored areas of the world. Mittal bought them dirt-cheap, fixed them up, and set them back on a moneymaking path.
By 2006, Mittal had built a revolutionary steel empire. It was the first truly global steel company, stretching across 16 countries. This made his company the largest steelmaker on Earth.
But size wasn't enough. Mittal wanted the one prize insiders swore he'd never touch...
The crown jewel of Europe's steel business – Arcelor.
Arcelor prided itself on its heritage. It came from the best steelmakers of France, Spain, and Luxembourg. And its executives saw themselves as guardians of Europe's industrial legacy.
To them, Mittal was an outsider and a disruptor.
So, when Mittal launched a $22.5 billion bid for the company, Arcelor didn't just say no.
It went to war.
Arcelor's CEO mocked Mittal Steel's business practices with racist insults. The French government invoked "economic patriotism" to shield its national treasure.
Mittal didn't flinch. He raised his offer multiple times. And he soothed European nerves by promising to protect jobs and labor rights.
It took five brutal months of poison pills and backroom deals – but Mittal finally wore Arcelor down.
Arcelor's board surrendered in June 2006. The outsider won. Now, a single company produced 10% of the world's steel.
Today, that same company is building toward one of its strongest moments in years. And not enough people are paying attention...
For decades, investors were told to buy great companies and wait years for their gains. But according to finance legend Marc Chaikin, a new reality is creating lightning-fast opportunities to pull thousands of dollars out of the market quickly and repeatedly, often in mere days. Tomorrow, he'll reveal his first-ever "Income Acceleration Project" and explain why it's going to flip the script on how you could make extraordinary returns. Click here to secure your spot (100% free).
The combined company is ArcelorMittal (MT). And two decades after that takeover fight, it still ranks among the largest steelmakers on Earth.
The company has had a rough few years. Interest rates jumped, and revenue declined as building slowed. But the pace is picking back up...
Right now, governments around the world are opening their wallets for infrastructure, power grids, and defense build-outs.
Of course, each of these projects starts with steel...
ArcelorMittal's steel appears in everything from skyscrapers and bridges to pipelines, cars, and wind turbines.
We can see the expanding infrastructure build-out in ArcelorMittal's most recent earnings...
Sales came in at $16.8 billion in the company's second quarter. This is a modest gain of about 5% year over year.
That may not sound like much, but a deeper dive shows us where the real story is...
If you couldn't guess – it's in Europe.
You see, for years, the company's European mills posed its biggest headaches.
That trend changed this quarter...
Operating income from Europe rose sharply, jumping 72% from the first quarter to $410 million. This gain is thanks to a new set of tariff-quota guidelines recently rolled out by the European Union ("EU").
The EU designed its system to reduce the flood of cheap imports. The goal is to hand pricing power back to the continent's own producers.
That's a massive tailwind for the largest steelmaker in Europe. And management expects the momentum to keep growing.
Our system agrees with ArcelorMittal's management. The Power Gauge sees the company's strength "under the hood."
Right now, ArcelorMittal gets a "bullish" rating from our system – with a strong showing in three of the four categories...
The Power Gauge flags earnings as the only soft spot for the company. But the steel industry is often cyclical – meaning the downturn wasn't ArcelorMittal's fault.
Wall Street's biggest investors see this as well...
The Chaikin Money Flow is now firmly in the green. This means that big institutions are scooping up shares of the company.
It's not hard to see that there are currently big tailwinds for the company... rising sales, firmer prices, and a European business roaring back to life.
So keep an eye on ArcelorMittal in the months ahead. The Power Gauge sees more upside on the horizon.
Good investing,
John Evelius Editor's note: Our founder Marc Chaikin has used the Money Flow Indicator to find plenty of quick, double-digit winners for subscribers in the past...
And now, he sees a historic market "splintering" that could soon devastate buy-and-hold investors. But at the same time, it could also create an incredible opportunity to collect regular payouts of hundreds – or thousands – of dollars in as little as a week... If you know what's coming.
Tomorrow morning, at 10 a.m. Eastern time, Marc is going on camera for a special broadcast with the full story. As part of it, he'll share a way to follow the smart money to big gains during this market "splintering."
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain somewhat Bullish. Major indexes remain all bullish.
* * * *
Sector Tracker
Sector movement over the last 5 days
Communication
+1.43%
Information Technology
+1.30%
Financial
+1.08%
Utilities
-0.09%
Staples
-0.63%
Materials
-0.67%
Discretionary
-0.69%
Real Estate
-1.33%
Energy
-1.51%
Industrials
-1.73%
Health Care
-1.98%
* * * *
Industry Focus
Regional Banking
49
96
13
Over the past 6 months, the Regional Banking subsector (KRE) has underperformed the S&P 500 by 2.44%. However, its Power Bar ratio which measures future potential is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #9 of 21 subsectors and has moved down 1 slots over the past week.
Top Stocks
AMAL
Amalgamated Financial Corp.
BCAL
California BanCorp
BPOP
Popular, Inc.
* * * *
Top Movers
Gainers
WDAY
+5.76%
DPZ
+5.40%
LULU
+5.05%
NOW
+4.54%
SLB
+4.22%
Losers
PYPL
-12.71%
MRVL
-10.28%
PCG
-7.52%
GNRC
-6.84%
LITE
-6.39%
* * * *
Earnings report
Earnings Surprises
No significant Earnings Surprises in the Russel 3000.
* * * *
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