How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Nucor (NUE) ten years ago? It may not have been easy to hold on to NUE for all that time, but if you did, how much would your investment be worth today?
With that in mind, let's take a look at Nucor's main business drivers.
Headquartered in Charlotte, NC, Nucor Corporation is a leading producer of structural steel, steel bars, steel joists, steel deck and cold finished bars in the United States. It also produces direct reduced iron (“DRI”) that is used in its steel mills. The company has 123 operating facilities, primarily in the United States and Canada. Also, most of its operating facilities and customers are located in North America. Over the years, the company has grown through acquisitions as well as by tapping new markets and expanding geographically. Through its network of “mini-mills”, the company produces steel sheets, bars, plates as well as various structural and other products. Nucor, in 2014, completed the acquisition of Gallatin Steel Company from global steel giant ArcelorMittal and Brazilian steel maker Gerdau for roughly $770 million in cash. Notably, the company is North America’s largest recycler, which uses scrap steel as the primary raw material in producing steel and steel products.
Nucor operates in three segments – the Steel Mills segment (25.7 million shipments in 2021), the Steel Products segment and the Raw Materials segment. The Steel Mills segment manufactures hot rolled steel products such as angles, rounds, flats, channels, rebar, sheets, wide-flange beams, pilings, billets, blooms, beam blanks, and plates; and cold-rolled steel products. The Steel Products segment makes steel joists and joist girders, steel deck, cold finished steel, steel fasteners, metal building systems and light gauge steel framing among other products. The Raw Materials segment produces direct reduced iron, ferrous and nonferrous metals, and pig iron; ferro-alloys; and processes ferrous and nonferrous scrap from the facility in Trinidad.
Nucor sells its hot-rolled steel and cold-rolled steel to steel service centers, fabricators, and manufacturers; steel joists and joist girders, and steel deck to general contractors and fabricators; and cold finished steel and steel fasteners to distributors and manufacturers. Its steel products are used in highways, bridges, reservoirs, utilities, hospitals, schools, airports, stadiums and high-rise buildings.
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Nucor ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in March 2012 would be worth $3,557.82, or a gain of 255.78%, as of March 25, 2022, and this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 223.54% and the price of gold went up 13.37% over the same time frame.
Looking ahead, analysts are expecting more upside for NUE.
Earnings estimate for Nucor for the first quarter of 2022 have been going up over the past month. The company is committed to expand its production capabilities and grow its business through strategic acquisitions. Nucor has already commissioned some of its growth projects. It is committed to boost production capacity, which should drive profitable growth and strengthen its position as a low-cost producer. The company is also seeing strong momentum in the non-residential construction market. Nucor is also seeing strong demand in the heavy equipment market. The company also remains focused on achieving greater penetration of automotive market because of its long-term growth opportunities. Higher steel prices due to tight supply and higher end-market demand should also drive Nucor’s margins.
The stock is up 26.98% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 4 higher, for fiscal 2022. The consensus estimate has moved up as well. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Nucor Corporation (NUE) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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