Steel Dynamics subject of stock value case study

Chicago-based Zacks Equity Research has calculated that someone who invested in the stock of scrap-melting Fort Wayne, Indiana-based steelmaker Steel Dynamics Inc. (SDI) would have earned a 488 percent return on a $1,000 investment made in August 2011.

“A $1,000 investment made in August 2011 would be worth $5,887.76, or a 488.78 percent gain, as of August 19, 2021, according to our calculations,” writes the resarch firm, saying the return excludes dividends but includes price increases.

Zacks adds, “In comparison, the S&P 500 gained 285.77 percent and the price of gold went down by 7.14 percent over the same timeframe.”

The research firm says “analysts are anticipating more upside” for the electric arc furnace (EAF) steelmaker, adding, “The company is expected to gain from acquisitions as well as strong liquidity and efforts to expand capacity.”

Zacks characterizes the EAF steelmaking operations of SDI as comprising 74 percent of its revenues, followed by 11 percent for its Metals Recycling Operations business unit (which includes Fort Wayne-based OmniSource Corp.) and another 9 percent deriving from its Steel Fabrication Operations.

Regarding SDI’s Metals Recycling Operations, Zacks writes, “The operations of the division include ferrous and nonferrous scrap metal processing, transportation, marketing and brokerage services. The unit purchases, processes and resells ferrous and nonferrous scrap metals into reusable forms and grades. End users of these products include EAF steel mills, integrated steelmakers, foundries, secondary smelters and metal brokers.”