NEW YORK May 8 (Reuters) - United States Steel Corp (X.N: Quote) shares are down 20 percent so far this year, even though domestic steel prices are up over 30 percent since late 2010, creating a potential buying opportunity, Barron's newspaper said.
Investors are concerned about a further fall in steel prices, which are down from a high in early April. But one analyst told Barron's that the market had an overly bearish view of steel prices, and the fall in prices will be mild and short lived.
U.S. Steel's shares do not look overly cheap, trading at 18 times projected 2011 profits of $2.53. They look more reasonable based on estimated 2012 profits of $5.45, which may be conservative, said Barron's in its May 8 edition.
The company, which is the world's 11th largest steel maker, is highly sensitive to steel prices and therefore its shares are volatile, said Barron's.
U.S. Steel's domestic steel operations are almost self-sufficient in iron ore, a key advantage over rivals. It could also become a target of a takeover bid in a consolidating market, said Barron's.
Investors are concerned about a further fall in steel prices, which are down from a high in early April. But one analyst told Barron's that the market had an overly bearish view of steel prices, and the fall in prices will be mild and short lived.
U.S. Steel's shares do not look overly cheap, trading at 18 times projected 2011 profits of $2.53. They look more reasonable based on estimated 2012 profits of $5.45, which may be conservative, said Barron's in its May 8 edition.
The company, which is the world's 11th largest steel maker, is highly sensitive to steel prices and therefore its shares are volatile, said Barron's.
U.S. Steel's domestic steel operations are almost self-sufficient in iron ore, a key advantage over rivals. It could also become a target of a takeover bid in a consolidating market, said Barron's.
(Reporting by Helen Kearney; editing by Gunna Dickson, souced Thomson Reuters)
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