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Bear of the Day: Commercial Metals (CMC)

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With the market rocketing to all-time highs, it can feel like any stock you decide to invest in will go straight up. That could not be further from the case. There are copious risks still out there in the market. When the euphoria following the election wears off, the tide will come in. When the pullback arrives, you want to be ready to buy stocks with strong earnings trends on the dip. You’ll also want to avoid stocks which have seen their earnings move in the wrong direction.

Today’s Bear of the Day is a stock that has seen its earnings picture deteriorate. The trend coming from analysts across Wall Street is to revise expectations to the downside. That’s not what you want to see over the long run as an investor. Today’s Bear of the Day is Commercial Metals ((CMC - Free Report) ).

Commercial Metals Company manufactures, recycles, and fabricates steel and metal products, and related materials and services in the United States, Poland, China, and internationally. The company processes and sells ferrous and nonferrous scrap metals to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers. 

Commercial Metals is currently a Zacks Rank #5 (Strong Sell). The reason for the unfavorable rank is recent negative earnings revisions coming from analysts all over Wall Street. Over the last thirty days, three analysts have cut expectations for the current year while two have done so for next year. The negative revisions have dropped our Zacks Consensus Estimate for the current year from $5.59 to $4.35 while next year’s number is off from $6.00 to $5.42. The good news for long-term investors is that 24% earnings growth is still forecast for next year.

Zacks Investment Research
Image Source: Zacks Investment Research

The Steel – Producers industry ranks in the Bottom 9% of our Zacks Industry Rank. There are no stocks in that industry which are in the good graces of our Zacks Rank. However, there are some stocks which are Zacks Rank #3 (Hold) stocks. These include Legato Merger ((ASTL - Free Report) ) and ArcelorMittal ((MT - Free Report) ).


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ArcelorMittal (MT) - free report >>

Commercial Metals Company (CMC) - free report >>

Algoma Steel Group Inc. (ASTL) - free report >>

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