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Tuesday,
October 21, 2008
(Cont'd from
above)...
Nucor Corporation (NUE)'s
got a "fortress"
balance sheet...
$1.7 billion in
cash. Of course, it
has that juicy
dividend. Based on
next year's expected
payout, this one
could yield 5.7% at
these levels. I
mean, that's big.
Remember, even the
biggest CDs (i.e.,
certificates of
deposit) are offered
at about 4%.
But, even though NUE
gave us a great
quarter, there are
reasons to be
anxious...
Management, for a
change, didn't
provide any guidance
for the next
quarter, probably
because NUE's CEO,
Dan DiMicco, might
have gotten too
aggressive. I don't
know... He got a
little aggressive on
Erin's (i.e., CNBC's
Erin Burnett) show,
Street Signs,
shortly before steel
prices, and NUE's
stock, peaked... and
he said... and we're
going to ask him
about this, because
we're not a
sandbagger, and
we're going to ask
him... (He said:)
"We've got many,
many years ahead of
us of a strong cycle
for commodities. Now
the trend will be
upwards, very
strongly I would
say..." This is me
quoting him... "...
for another 15 to 20
years, and that
doesn't mean there
won't be ups and
downs, but the downs
will be short-lived
and the trend will
be upwards."
Obviously, we want
to find out if this
"down" is going to
be short-lived...
Now I think Dan
DiMicco is a
fabulous CEO and a
great guy... But,
look, the commodity
collapse is more
evident, so I have
to be more cautious.
You have to be more
cautious. Anybody
should be more
cautious about a
steel stock. I
watched Bethlehem
Steel go from $23 to
$2 in about two
years. That was not
a great company
though.
NUE did an equity
offering back on May
22nd, at about $74 a
share. That's about
$38 higher than the
stock is now. Great
for the company but,
perhaps, just awful
for the people who
got it... No, not
"perhaps"... It was
just awful for the
people who got in on
the deal...
After the latest
quarter and, given
that the stock's
been more than cut
in half, and now has
a terrific yield, I
think
Nucor Corporation (NUE)
is a buy, but my
credibility is
shot... as I've
liked it all the way
down. I've liked it
for years and years
and years... even
before... even with
the previous CEO.
That's why we bring
on the chairman,
president and CEO of
a company... Dan
DiMicco, here to
talk about the
company...
Mr. DiMicco, welcome
back to Mad Money...
Jim's comments AFTER
the CEO interview:
Look, it's not the
same as all the
other companies!
I only pick
industrials that I
feel are going to be
able to withstand
even the situation
he talked about...
about a global
collapse.
That's only about a
half dozen
industrials.
But I'll identify
them for you, and
I'll tell you which
ones to stick
with...
Read Jim's next Segment
here
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