Why AK Steel Holding Corporation Soared Today
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of steel producer AK Steel Holding Corporation surged 15% today after its quarterly results easily beat analyst expectations.
So what: The stock has plunged in recent weeks on concerns over a pullback in steel prices, but today's Q4 results -- adjusted EPS of $0.09 topped Wall Street expectations by $0.04 on a revenue increase of 3% -- are quickly easing those worries. In fact, AK's average selling price for the quarter was $1,031 per ton, representing a 2% increase over the year-ago period, suggesting that gross margins are holding up much better than expected.
Now what: Don't expect the operating momentum to slow anytime soon. "I am delighted with our fourth quarter 2013 results and our strong finish to the year 2013," said Chairman, President, and CEO James Wainscott. "As we enter 2014, we will build upon our solid foundation for the future as we continue to make progress and add value to AK Steel." More importantly, with the stock still off more than 20% from its 52-week high, it seems there is plenty of room left to buy into that bullishness.
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Brian Pacampara has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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