Today Nucor fell 6.5% due to the recent speculation of consolidation of the steel industry. Keep in mind that today's decline is against the previous day's outsized gains. The recent speculation is primarily due to Mittal Steel's (MT) recent bid to acquire Arcelor. Mittal is the world's largest steel producer and getting larger by the minute. Naturally, when the world's largest steel producer attempts to acquire the world's second largest steel producer the impression is that there is room for more consolidation.
In the U.S., monolithic steel producers have fallen to the wayside as smaller, better managed "boutique" producers have moved forward. My feeling is that US regulators will step in to block any acquisition from a "foreign" company. If this is the case, I feel that domestic producers will possibly jump the gun and initiate a wave of domestic acquisition that could lead to larger and potentially poorly managed companies. LTV and Bethlehem Steel are steel companies that had faced bankruptcy due to inefficient operations.
I don't think that immediately after Mittal's most recent target (provided that it is successful) will mean more acquisitions in the near term. This will put the speculator, hopeful of another big move upward, at the bad end of the deal...in the short term. Nucor is one of those better managed steel companies. NUE has increased its dividend for 32 consecutive years in a row. NUE has a tangible book value of $21.67 per share.
Biggest percentage gainer of the day: Hillenbrand Industries (HB)
Hillenbrand’s price increased 6.65% due to higher earnings. This company’s stock price has fallen from it’s high of $70 in 2004. Hillenbrand has increased its dividend every year for 34 consecutive years.
