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Analyst Explains Why AK Steel Was The Best Turnaround Story Of 2016

AK Steel Holding Corporation  was one of 2016's hottest stocks, having gained around 125 percent over the past three months alone and more than 360 percent over the past year.

Philip Gibbs of Keybanc was a guest on CNBC to explain what contributed to the extraordinary gains.

According to Gibbs, AK Steel was one of the best turnaround stories of 2016 after the company's management team made some key changes, including cutting capacity and focusing on cost cutting.

AK Steel also benefited in the first quarter of 2016 when it won key tariffs in the products it sells.

Needless to say, after a triple-digit percentage return in 2016, investors shouldn't expect a similar performance in 2017. Gibbs stated that many of the catalysts that would have boosted AK Steel's stock have already played out. The initiatives also helped boost the company's balance sheet, which is key for long-term investors.

On the other hand, the analyst noted he has become more positive on the company over the past few days given the manufacturing policies under President-elect Donald Trump's administration will be more favorable for the group as a whole and U.S. manufacturing.

Gibbs did suggest that investors buy shares of Nucor Corporation  as a better source of alpha moving forward.

Latest Ratings for AKS

DateFirmActionFromTo
Dec 2016Deutsche BankMaintainsHold
Nov 2016JP MorganMaintainsOverweight
Nov 2016MacquarieDowngradesOutperformNeutral

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View the Latest Analyst Ratings

  • 37 37 correctly predicted forecasts
    Max Grigoryev
    I still think that the biggest turnaround story is Adobe, look how impressive their metrics are
    Reply
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