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STLD -- USA Stock  

USD 42.07  1.79  4.08%

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By Vlad Skutelnik  
Macroaxis Story
It looks as if Steel Dynamics will continue to recover much faster as its share price surged up 0.10% today. The company current daily volatility is 2.64 percent, with a beta of -0.03 and an alpha of 0.27 over DOW. While some baby boomers are getting worried about disruptive technologies, it is reasonable to digest Steel Dynamics. We will cover the possibilities of making Steel Dynamics into a steady grower in February.
Published over a month ago
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Should you exit Steel Dynamics after the latest volatility dip?
Steel Dynamics currently holds roughly 1.27 B in cash with 1.26 B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 6.03. Steel Dynamics recommendation module can be used to check and cross-verify current trade recommendation provided by analysts inspecting the firm's potential to grow using all of fundamental, technical, data market data available at the time.
Investing in Steel Dynamics, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Steel Dynamics along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Steel Dynamics' stock price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Steel Dynamics in the context of predictive analytics.
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Please note, it is not enough to conduct a financial or market analysis of a single entity such as Steel Dynamics. Your research has to be compared to or analyzed against Steel Dynamics' peers to derive any actionable benefits. When done correctly, Steel Dynamics' competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Steel Dynamics.

How important is Steel Dynamics's Liquidity

Steel Dynamics financial leverage refers to using borrowed capital as a funding source to finance Steel Dynamics ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Steel Dynamics financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Steel Dynamics's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Steel Dynamics, but it might be worth checking our own buy vs. sell analysis

Steel Dynamics Correlation with Peers

Investors in Steel can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Steel Dynamics. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Steel Dynamics and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Steel is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage.
Please check volatility of Steel for more details

An Additional Perspective On Steel Dynamics

Steel Dynamics appears to be very steady, given 1 month investment horizon. Steel Dynamics owns Efficiency Ratio (i.e. Sharpe Ratio) of 0.14, which indicates the firm had 0.14% of return per unit of risk over the last month. Our standpoint towards measuring the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-one technical indicators for Steel Dynamics, which you can use to evaluate future volatility of the company. Please operate Steel Dynamics Coefficient Of Variation of 992.1, risk adjusted performance of 0.1039, and Semi Deviation of 2.08 to confirm if our risk estimates are consistent with your expectations.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Steel technical analysis indicates possible bounce-back

The market risk adjusted performance is down to -8.95 as of today. Steel Dynamics currently demonstrates below-verage downside deviation. It has Information Ratio of 0.03 and Jensen Alpha of 0.27. However, we do advice investors to further question Steel Dynamics expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Bottom Line On Steel Dynamics

Although some other companies within the steel industry are still a little expensive, even after the recent corrections, Steel Dynamics may offer a potential longer-term growth to shareholders. While some next week oriented shareholders may not share our view, we believe it may not be a good time to buy new shares of Steel.

About Contributor

Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management. View Profile
This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Steel Dynamics. Please refer to our Terms of Use for any information regarding our disclosure principles.

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