Steel Dynamics (STLD)
Materials · NASDAQ · US
Fundamentals
Valuation and ratings
Steel Dynamics trades at $234.98, which is 53% below the $358.82 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 47 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 24.5 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Steel Dynamics
Steel Dynamics, Inc., together with its subsidiaries, operates as a steel producer and metal recycler in the United States. It operates through four segments: Steel Operations, Metals Recycling Operations, Steel Fabrication Operations, and Aluminum Operations. The Steel Operations segment offers hot rolled, cold rolled, and coated steel products; parallel flange beams and channel sections, large unequal leg angles, and reinforcing steel bars, standard strength carbon, intermediate alloy hardness, and premium grade rail products; engineered special-bar-quality products, merchant-bar-quality products, and other engineered round steel bars; channels, angles, flats, merchant rounds, and reinforcing steel bars; and specialty shapes and light structural steel products. This segment also engages in turning, polishing, straightening, chamfering, precision saw-cutting, and heat treating of bar products. Its products are used in construction, automotive, manufacturing, transportation, heavy and agricultural equipment, energy, and pipe and tube markets. The Metals Recycling Operations segment is involved in the ferrous and nonferrous scrap metal processing, transportation, marketing, brokerage, and scrap management services. Its ferrous products include heavy melting steel, busheling, bundled scrap, shredded scrap, steel turnings, and cast-iron products; and nonferrous products comprise aluminum, brass, copper, stainless steel, and other nonferrous metals. The Steel Fabrication Operations segment produces steel non-residential building components, such as steel joists, joist girders, and steel deck products for non-residential steel fabricators, metal building companies, general construction contractors, developers, property owners, brokers, and governmental entities. The Aluminum Operations segment offers recycled aluminum flat rolled products. The company also exports its products. Steel Dynamics, Inc. was incorporated in 1993 and is headquartered in Fort Wayne, Indiana.
STLD passes 3 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
9 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Capital Research Global, Capital Research Global Investors$653.55M · 0.1% of book
- Ken Griffin, CITADEL ADVISORS LLC$92.27M · 0.0% of book
- Bridgewater Associates, LP$78.85M · 0.3% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$59.93M · 0.0% of book
- Hosking Partners, Hosking Partners LLP$29.44M · 1.1% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Steel Dynamics (STLD) undervalued?
Against our discounted cash flow estimate of $358.82, STLD at $234.98 is 53% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own STLD?
9 of the institutions we track reported a position in STLD in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is STLD's P/E ratio?
STLD trades at 24.5 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for STLD, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.