When it comes to certain penny stocks to buy or sell, it may depend on the industry that a company is in. The steel industry in the United States, for example, hasn’t had the best time since the financial downturn of 2008. But one of the companies that have had a particularly tough time during the past decade is AK Steel Holding Corporation (AKS Stock Report). This penny stock has been in the red 8 of the last 10 years. But it has been one of the most popular penny stocks Robinhood traders have been watching this summer.
But, most recently, the company has worked diligently to improve its balance sheet. The restructuring process is planed to continue over the course of the next year. Unless steel prices collapse, the company should be able to continue its efforts. Is this good for AK Steel stock?
The penny stock has seen a solid recovery since early June. In fact, AKS stock recovered almost 45% from its 52-week low of $1.66. Let’s look at the company and see if you think it is a penny stock to buy or sell right now.
Are Steel Stocks Presenting Opportunities?
Since AK Steel uses blast furnaces to produce its steel, costs are often higher than other producers. These competitors likely use electric arc mills and hence, downturns can have an adverse effect on the company. AK Steel stock really struggled during the last slump in the steel industry. This was as the U. S. market saw a flood of low priced imports.
However, a cap on steel imports by the government eventually came to the company’s rescue. In 2017, AKS stock swung back to profits. Last year, the steel producer generated $0.59 per share in earnings per share. In Q1 2019, the company generated losses of a penny per share. But that was due to one-time items. Without those, AK could have generated $0.23 earnings per share.
AK Steel (AKS) Balance Sheet
Investors have gone through a lot of pain while the company continued its turnaround. Now, they need to be patient as AK Steel fine-tunes its balance sheet further. However, even if the company manages to improve its balance sheet significantly, it would still remain a relatively small player in the industry. On top of that, the fact that the steel industry is prone to boom and bust cycles is a constant source of anxiety for the company.