Andrew PyleAlgoma Steel Group IncASTL.TOWATCHJun 05, 2023

(A Top Pick Aug 01/23, Up 24.7%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with ASTL has achieved our $12.50 target.  To be disciplined, we recommend covering half the position and trailing up the stop (from $9.25) to $10.00 at this time.  

(A Top Pick Aug 01/23, Up 11.2%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with ASTL is progressing well.  To remain disciplined, we recommend trailing up the stop (from $8.50) to $9.25 at this time.  

Stockchase Research Editor: Michael O'Reilly

ASTL is one of Canada's largest steel producers.  It trades at 6x earnings, under book value and supports a 19% ROE.  Previously reported earnings indicated cost over runs and project delays that we feel have been fully discounted into the price.  Meanwhile plate mill modernization is moving ahead of schedule.  Its dividend is backed by a payout ratio under 20% of cash flow.  We recommend a stop-loss at $8.50, looking to achieve $12.50 -- upside potential over 21%.  Yield 2.6%  

(Analysts’ price target is $12.75)

(A Top Pick Feb 09/23, Down 13.6%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with ASTL has triggered its stop at $9.50.  To remain disciplined, we recommend covering the position at this time.  This will result in a net investment loss of 2%, when combined with the previous buy recommendation.

(A Top Pick Feb 09/23, Up 12.5%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with ASTL is progressing well.  We recommend trailing up the stop at this time to $9.50.

Stockchase Research Editor: Michael O'Reilly

We again reiterate this Canadian based steel producer as a TOP PICK.  Trading at under book value and supporting a 66% ROE it remains good value.  The company is growing cash reserves while it aggressively retires debt.  Its dividend is backed by a payout ratio under 10% of cash flow.  We recommend trailing up the stop-loss (from $7.50) to $8.50, looking to achieve $13.25 -- upside potential over 21%.  Yield 2.4%.

(Analysts’ price target is $13.21)

Stockchase Research Editor: Michael O'Reilly We again reiterate this low cost producer of supplier of rolled steel to Canada and US Midwest as a TOP PICK. Recent corporate guidance disappointed the market as mill modernization did not go as per plan. However, they expect 2023 shipments to return to normal projections going forward. We like that they are back to building cash reserves, despite retiring debt. It continues to trade below book value. We continue to recommend keeping the stop loss at $7.50, looking to achieve $13.00 -- upside potential over 50%. Yield 3.0% (Analysts’ price target is $13.06)

Stockchase Research Editor: Michael O'Reilly We reiterate this low cost producer of supplier of rolled steel to Canada and US Midwest as a TOP PICK. Although recession fears are slowing demand for their product (resulting in steel prices plunging from $2000 US per ton to under $750), the fact remains the world is short raw materials. The company has bought back over a third of its shares and holds over $500 million in cash reserve according to one hedge fund holder and it trades below book value. We recommend keeping the stop loss at $7.50, looking to achieve $14.00 -- upside potential over 50%. Yield 3.0% (Analysts’ price target is $13.81)

Stockchase Research Editor: Michael O'Reilly This low cost producer of supplier of rolled steel is a key supplier of steel to Canada and US Midwest. It recently reached an agreement with union workers for the next five years and expects capacity to be ramping back up shortly after a few operational shortfalls. It trades under book value and manages a ROE over 75%. We like how it has increased cash reserves, while retiring debt. We recommend setting a stop loss at $7.50, looking to achieve $14.50 -- upside potential over 52%. Yield 2.2% (Analysts’ price target is $14.38)