Steel Dynamics (STLD ) Estoque Fórum e discussão

January 2023 was all about recovery - the positive momentum returned to the stock market. After a difficult 2022, I am even more pleased to start this year on a positive note. In my review for last year, I was optimistic about the coming year 2023: It looks like inflation is slowing somewhat - especially in energy prices. I am always impressed by how quickly the world adapts to challenges and finds solutions to overcome them. I am firmly convinced that 2023 will also present us with one or two challenges, and that we will master them.

Asset Management - Value & Momentum worldwide

After outperforming the overall market by over 10% in 2022, the Value and Momentum strategy continues to do the same in January 2023: an average return of 17.9% and a return of 62.2 % since the start is quite respectable. I remember very well when we were at an average return of 13.4% in October 2022 and even got down to almost 12% on days.

When investing in stocks, it's not individual months or years that matter: What matters is long-term performance. In the short term, individual events or the behavioral psychology of human beings can move share prices - almost always resulting in an exaggerated reaction. Or as Benjamin Graham once said, "In the short run, the market is a voting machine but in the long run, it is a weighing machine."

Stock prices will always be slightly above or below the effective values of companies. In the long run, however, the price of shares is always linked to the real value of companies.

Rebalancing Value and Momentum

Three companies from two continents from one sector are new: All three companies are from the commodities sector. They are among the top 10 % companies worldwide - selected according to strict value criteria and key figures of the Value Composite. In addition, all three meet the highest quality criteria in corporate financing, Efficiency and profitability. Due to the current world situation, the price momentum for these companies is very strong. In some cases, they are even benefiting in two ways: on the one hand, from the promotion of renewable energies and, on the other, from the current shortage of certain commodities. This puts them on the buy list for the value and momentum portfolio.

When people think of the commodities sector, they often don't associate it with sustainability - at least not in the positive sense - certainly not when it comes to coal or steel. But sustainability is not that simple: Without steel, not a single wind turbine or electric car would be built. Even the construction of a dam would be rather difficult without steel. Companies like the Australian Coronado Global Resources, mine the metallurgical coal needed to produce steel. So it's not a question of whether we need these raw materials, but how we use them. That's where another company comes in: Steel Dynamics from the USA produces and processes this steel. Steel Dynamics also specializes in recycling a wide variety of metals. This ensures that those raw materials that have already been extracted are reused instead of being disposed of.

The third company ensures that Europe in particular does not run out of gas with its huge tankers. This after supplies from Russia were cut: The talk is of Dorian LPGwhich is ideally located on the North Atlantic for the global supply of liquefied gas.

I sold AdvanSix this month - the share price did not really move in the past 12 months. With - 3.8 % there is no big loss, but no profit either. From a value point of view, the company is still favorable and qualitatively it is also in a good position with 8 out of a maximum of 9 points. But the momentum has unfortunately been completely lost. Therefore, AdvanSix had to make room for companies that fulfill all three criteria of the value and momentum portfolio.

The newcomers in the portfolio

Coronado Global Resources:

2011 saw the launch of Coronado Global Resources launched by entrepreneur and current CEO Garold Spindler, COO James Campbell and Energy and Minerals Group (EMG). The headquarters is located on Australia's east coast in the capital city of Queensland: Brisbane.

The company produces high quality metallurgical coal. Metallurgical coal is transformed in the steelmaking process and is needed to produce steel-based products. These in turn are needed, for example, to build a dam or to manufacture wind turbines.

Coronado Global Resources operates in Queensland, Australia as well as in the states of Pennsylvania, Virginia and West Virginia in the United States of America.

Dorian LPG:

The company specializes in the global transportation of liquefied petroleum gas (LPG) and was founded in 2013. The headquarters are located in Stamford on the east coast of the USA in the state of Connecticut.

It currently owns and operates a fleet of 22 very large gas tankers in total. These can transport between 100,000 cubic meters and 200,000 cubic meters of gas at a time. A household of 80m2 consumes an average of about 93.33 cubic meters of gas per month. This means that a single one of these shiploads can heat over 2,000 households for a month.

Steel Dynamics:

The company was founded in 1993 and is headquartered in the Midwest of the USA - in Fort Wayne, Indiana.

The company's main business consists of the following three segments:

Steel Processing: Processing produces directly for the end user. The products are mainly used in the automotive industry, transportation, heavy industry and agriculture.

Recycling: The company buys ferrous as well as non-ferrous scrap. It is then processed so that it can be resold in reusable forms and grades. Recycled products include difficult-to-melt steel, bundled and shredded scrap, steel chips and cast iron products. Non-ferrous products recycled include aluminum, brass, copper, stainless steel and other non-ferrous metals.