Steel Still Works?

Tuesday, 24 Jun 2008 | 3:40 PM ET

The U.S. Steel CEO said earlier Tuesday the recent jump in raw materials prices will push steel prices higher. So is now the time to pile up on steel stocks?

I think you might be a little late to the party, says Guy Adami on CNBC’s Closing Bell, but not that late. Goldman just put “letter X” on it’s Conviction Buy List with a $225 price target. It’s trading 10 and a half times forward earnings. If you think that valuation is too rich, I say they will grow into that multiple.

Any other plays?

The play that nobody talks about for steel is Freeport McMoRan . It’s a great performing stock. They mine molybdcenum which is a key component of steel making.

And I like Nucor as a possible takeover target.

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