10 Best Basic Materials Stocks To Buy Now

7. United States Steel Corporation (NYSE:X)

Number of Hedge Fund Investors: 58 

Market Capitalization as of October 10, 2024: $8.02 billion

Although it maintains a steelmaking facility in Slovakia, United States Steel Corporation (NYSE:X)  mostly operates in the United States. North American Flat-Rolled (Flat-Rolled), Mini Mill, U. S. Steel Europe (USSE), and Tubular Products (Tubular) are the company’s operating segments. The Flat-Rolled segment comprises all iron ore and coke production facilities in the United States, as well as the integrated steel plants and equity investors of U. S. Steel in North America that produce slabs, strip mill plates, sheets, and tin mill products. Its main clientele is in the North American service center, conversion, construction, appliance, container, and electrical markets.

U.S. Steel was raised by JPMorgan analyst Bill Peterson from Neutral to Overweight, with a price objective of $42, up from $40. The firm believes the risk/reward is better for North American steel shares “as investors will begin to positively discount an improved rate environment and stable post-election backdrop in 2025” after a period of underperformance amid declining fundamentals. The analyst believes that U.S. Steel and Nucor are best positioned for growth in the upcoming year. The recent decline in United States Steel Corporation (NYSE:X) stock, according to JPMorgan, “represents an attractive buying opportunity on standalone valuation support.”

The company released its third-quarter 2024 projection, estimating adjusted EBITDA of around $300 million and adjusted net profits per diluted share of between $0.44 and $0.48. The company anticipates strong domestic flat-rolled steel demand despite the difficult pricing environment, and it is reducing pricing concerns with a varied order book in North America. While the Tubular industry struggles with low costs, the Europe segment expects softer demand. Supported by strong community and employee support, U.S. Steel is also moving forward with strategic investments such as the Big River 2 start-up and the deal with Nippon Steel.

Matthew Halbowe’s Pentwater Capital Management is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 20,210,000 shares worth $763.93 million as of Q2.