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00. ("Nue Core," 2010) Arcelor Mittal has trailing PE ratio of 23.28 and a forward PE ratio of 7.09. The current ratio is 1.35 and the put call ratio is .55. The price dividend ratio is 45.74, while the beta is 2.70. ("Arcelor Mittal," 2010)
Upon doing a side by side comparison, Arcelor Mittal is the strongest company out of three. This is because their PE ratios remained more stable over the past year and the reading of 7.09 on the forward PE ratio, is an attractive long-term valuation. The high put call ratio indicates that investors have become somewhat pessimistic in the stock. The price dividend ratio is the only drawback, where historically this number should be in the 14 to 17 range. However, given the volatile nature of the steel industry, the fact that they are continuing to pay dividends after a severe recession is a sign of financial strength. The beta factor highlights that the price of the stock is nearly three times as volatile as the markets. ("Arcelor Mittal," 2010)
The reason why all three companies were chosen was to see the true effect of different financial tools on all of them; by looking at the stock from a fundamental and contrarian standpoint. Since the steel industry was affected by the recession, meant that there could be ideal opportunities to purchase shares at a fraction of their value. For the prudent investor who could identify these long-term opportunities and hold them, the stock represents such valuation....
Where, they have the potential to see better percentage gains in comparison with the major market averages.
Clearly, the approach that was taken when analyzing the above companies identified Arcelor Mittal as most attractive. This is because the company has lower PE ratios, high amounts of liquidity, extreme amounts of sentiment and it is continuing to pay dividends after a severe recession. As a result, these different factors have isolated the company as the strongest of three, within the industry.
Bibliography
Arcelor Mittal. (2010). Retrieved June 12, 2010 from Yahoo Finance website: http://finance.yahoo.com/q?s=MT
Arcelor Mittal. (2010). Retrieved June 12, 2010 from Schaffer's Research website: http://www.schaeffersresearch.com/streetools/indicators/putcall_open_interest_ratio.aspx
Nue Core. (2010). Retrieved June 12, 2010 from Yahoo Finance website: http://finance.yahoo.com/q/ks?s=NUE+Key+Statistics
Nue Core. (2010). Retrieved June 12, 2010 from Schaffer's Research website: http://www.schaeffersresearch.com/streetools/indicators/putcall_open_interest_ratio.aspx
US Steel. (2010). Retrieved June 12, 2010 from Yahoo Finance website: http://finance.yahoo.com/q/ks?s=X+Key+Statistics
US Steel. (2010). Retrieved June 12, 2010 from Schaffer's Research website: http://www.schaeffersresearch.com/streetools/indicators/putcall_open_interest_ratio.aspx
Bibliography
Arcelor Mittal. (2010). Retrieved June 12, 2010 from Yahoo Finance website: http://finance.yahoo.com/q?s=MT
Arcelor Mittal. (2010). Retrieved June 12, 2010 from Schaffer's Research website: http://www.schaeffersresearch.com/streetools/indicators/putcall_open_interest_ratio.aspx
Nue Core. (2010). Retrieved June 12, 2010 from Yahoo Finance website: http://finance.yahoo.com/q/ks?s=NUE+Key+Statistics
Nue Core. (2010). Retrieved June 12, 2010 from Schaffer's Research website: http://www.schaeffersresearch.com/streetools/indicators/putcall_open_interest_ratio.aspx
US Steel. (2010). Retrieved June 12, 2010 from Yahoo Finance website: http://finance.yahoo.com/q/ks?s=X+Key+Statistics
US Steel. (2010). Retrieved June 12, 2010 from Schaffer's Research website: http://www.schaeffersresearch.com/streetools/indicators/putcall_open_interest_ratio.aspx
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