Mark Parr, a steel analyst for KeyBanc Capital Markets, said the next year is prime time to stock up on steel.
“We think this continues to be a very fertile place for solid capital gains,” Parr said.
With the Dow Jones steel index increasing 40 percent in the last year and 5 percent in the last month, Parr offered a few of his stock picks to get in on the trading action.
Nucor's stock has increased 27 percent in the last year. Look to Nucor on the large-cap side because it is has been behind other steel companies, Parr said.
U.S. Steel's stock has increased 71 percent in the last year. Vertical integration is the best strategy for the steel industry, Parr said.
Reliance Steel & Aluminum's shares have increased 31 percent in the last year. A shortage in raw materials is another reason steel is a hot pick right now, Parr said. General industrialization will keep the demand high.
Olympic Steel stock has increased 161 percent in the last year. Look to Asia for increased demand, Parr said.
Steel Dynamics stock has increased 83 percent in the last year.
Disclosure information was not immediately available for Mark Parr and his company.