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By Malcolm Stacey | Thursday 8 March 2018
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Hello, Share Finders. Every time Big Donald makes some statement of a financial nature, the Dow slumps. The most recent occasion it happened, he announced new US trade tariffs on steel. However, American shares usually pick up soon afterwards, as they have now.
Evraz (EVR) has mining operations in the USA, Russia, Ukraine, Czech Republic, Italy, South Africa, Canada and oh, yes, Kazakstan. It produces steel, coal and vanadium. What’s vanadium, I hear you say? Well, it’s an element with the atomic number 23. It’s very rare in nature but turns up in 65 different minerals. It’s used to make steel stronger.
Evraz began this month by announcing some nice numbers for 2017. There was a strong cash flow of $1.32 billion. Its EBITDA was up a walloping 70% on the year before and it made an overall profit of $759 million, which was rather better than the 2016 number which came in at a $188 million loss. How’s that for a jolly turnaround?
We can guess why this change of fortunes might have taken place. Steel, which at one point a few years ago could not be given away, has been pushed into demand again. Part of this revival is down to emerging countries and their concentration on building new infrastructure.
Yes, Big Donald’s plan to slap tariffs on steel coming into the States is a worry, but there are many other markets out there. Evraz is a big company which has rallied magnificently - and its recovery may become even bigger.
That’s what we think in the Punter’s Return.
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