Quick Win by the Algorithm: United States Steel Corp. (X)

Quick Win by the Algorithm

United States Steel Corp. (X)

United States Steel Corporation produces and sells flat-rolled and tubular steel products in North America and Europe. It operates through three segments: Flat-Rolled Products (Flat-Rolled), U. S. Steel Europe (USSE), and Tubular Products (Tubular). The company also provides railroad services, and owns develops, and manages various real estate assets.

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On February 16th, the algorithm included United States Steel Corporation in the top 10 stocks in the long position for the Basic Industry package. Until recently, U.S. Steel has witnessed plummeting share prices. Analysts contribute this to the company’s deteriorating net income, generally high debt management risk, disappointing return on equity, and weak operating cash flow.

In spite of all of these weaknesses in the corporation, surging iron ore prices have pulled company stocks in the steel industry up with them. The prices of commodities like iron ore and steel have been suffering for some time now, but with Chinese officials working to straighten out their economy, demand for steel is on the rise. China is the world’s leading consumer of steel, so strengthing of the Chinese economy should lead to continued growth of steel companies such as U.S. Steel.

This surging growth, though, is happening based on market sentiment rather than fundamentals. Analysts are expecting further developments in China to affect the market price of X stock. Some see the actions of the Chinese government and the headwind behind U.S. Steel’s sails while others feel the stock is overbought at the current level.

In the forecast from February 16th, U.S. Steel Corp was included in the top 10 stocks to buy with a signal of 3.54 and a predictability of 0.46. In the 1-month period, the stock gained an outstanding 108.78%. Looking forward, the algorithm is continuing to give U.S. Steel a bullish signal for the mid to long-term but with signals of varying strengths.

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