Navellier: Steal this Steel Maker

01/02/2004 12:00 am EST

Focus:

Louis Navellier

Editor, Blue Chip Growth and Emerging Growth

There are few accolades that would overstate the quality and expertise inherent in the work of Louis Navellier, who through his MPT Review and Blue Chip Growth Letter has made modern portfolio theory accessible to the general investor. One of the most important factors in his analysis is earnings growth, as seen in his top pick for 2004.

"My top stock pick for 2004 is Schnitzer Steel (SCHN NASDAQ). The company processes almost 5 million tons of scrap steel and iron annually from auto salvage yards (it also owns Pick-N-Pull), demolition firms and other scrap dealers. All this steel and iron is recycled and sold to steel mills. The industrial expansion in China and Southeast Asia has been causing the prices of recycled steel to soar. The company’s biggest export market is China, but demand is also strong in Indonesia, Malaysia and Thailand. Schnitzer Steel’s operating margins have recently doubled, which caused it latest quarterly earnings to soar over 600%! The company’s has had over 50% annual sales growth during the past four quarters, but trades at less than 23 times forecasted earnings and only 17.2 times forecasted earnings."

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