Wednesday, July 27, 2011
AK Steel Holding Corp.
We are upgrading AKS shares to �Buy� from �Fair Value.� In our view, the selloff in AKS shares is overdone and the stock is likely to recover near term as steel prices stabilize. While AKS shares may be in the �doghouse� for a couple weeks, the potential for a steel price increase could lead to a 15-20% move in the stock near term.
AK Steel reported 2Q EPS of $0.32/share (excluding $0.02 tax charge) vs. CRT at $0.48 and Street $0.50. EPS were above $0.09/share reported in 1Q 2011. Quarter results were below expectations on higher than expected costs and a $0.21/share LIFO charge. Guidance for 3Q was disappointing relative to expectations coming into the quarter.
*Special thanks to Option Radar, BMO Capital, MEB Options, Bloomberg, Reuters, Optionistics, LiveVolPro, CBOE, AMEX, Option Monster, T.O.P. group, and all of the options desks and traders we work with to provide the option flow! No position at this time.
Position declarations are believed to be accurate at time of writing but may change at any time and without notice.