Steel Dynamics Inc (STLD)

[EZ2]

Analyst: Nucor well-positioned for acquisitions
Thursday November 20, 9:23 am ET


Analyst says Nucor could play important role as acquirer as steel industry faces challenges


PITTSBURGH (AP) -- A Goldman Sachs analyst said Thursday that steel producer Nucor Corp. was the sector's best positioned company, and that it could play an important role as an acquirer domestically and internationally.

Sal Tharani wrote in a note to investors that the Charlotte, N.C.-based steel maker was "solidly positioned to maneuver through, what we believe, will be the most challenging period for the steel industry in the past several years."

He cited Nucor's strong balance sheet, a well-diversified product mix and a variable cost structure.

Nucor operates electric arc furnaces, or minimills, which can be shut down and restarted more quickly than traditional blast furnaces to adjust for weaker demand.

Last month, the company said its third-quarter profit nearly doubled mainly because of robust sales from recently acquired steel and scrap-metal companies.

"Nucor, with its conservative investment policy and a healthy balance sheet, could play an important role in domestic and even international markets, to grow its business via some acquisitions, in our view," wrote Tharani, who has a "Buy" rating on the stock.

Shares of Nucor slipped 99 cents, or 3.5 percent, to $27.35 in pre-market trading.