July 31, 2013 10:52 AM | 4 min read
27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
United States Steel Corp. reports preliminary financial results for the quarter ended 2013-06-30.
United States Steel Corp. recently reported its preliminary financial results based on which we provide a unique peer-based analysis of the company. Our analysis is based on the company's performance over the last twelve months (unless stated otherwise). For a more detailed analysis of this company (and over 40,000 other global equities) please visit
www.capitalcube.com.
| Quarterly (USD million) | 2013-06-30 | 2013-03-31 | 2012-12-31 | 2012-09-30 | 2012-06-30 |
| Revenues | 4,429.0 | 4,595.0 | 4,487.0 | 4,652.0 | 5,017.0 |
| Revenue Growth % | (3.6) | 2.4 | (3.5) | (7.3) | (3.0) |
| Net Income | (78.0) | (73.0) | (50.0) | 44.0 | 101.0 |
| Net Income Growth % | N/A | N/A | (213.6) | (56.4) | N/A |
| Net Margin % | (1.8) | (1.6) | (1.1) | 0.9 | 2.0 |
| ROE % (Annualized) | (9.0) | (8.4) | (5.5) | 4.8 | 11.6 |
| ROA % (Annualized) | (2.1) | (1.9) | (1.3) | 1.1 | 2.6 |
Valuation Drivers
United States Steel Corp. trades at a lower Price/Book multiple (0.8) than its peer median (2.0). The market expects X-US to grow faster than the median of its chosen peers (PE of 474.5 compared to peer median of 20.8) and to improve its current ROE of -4.5% which is below its peer median of 5.2%. Thus, the market seems to expect a
turnaround in X-US's current performance.
The company's profit margins are below peer median (currently -0.9% vs. peer median of 0.6%) while its asset efficiency is about median (asset turns of 1.2x compared to peer median of 1.1x). X-US's net margin continues to trend downward but is still within one standard deviation above its five-year average net margin of -1.5%.
Growth & Investment Strategy
While X-US's revenues growth has been around the peer median in recent years (20.5% vs. 18.4% respectively for the past three years), the market gives its shares a higher than peer median PE ratio of 474.5. The market seems to see faster growth ahead.
X-US's annualized rate of change in capital of -2.6% over the past three years is less than its peer median of 5.9%. This below median investment level has also generated a less than peer median return on capital of -2.8% averaged over the same three years. This outcome suggests that the company has invested capital relatively poorly and now may be in
maintenance mode.
Earnings Quality
X-US reported relatively weak net income margins for the last twelve months (-0.9% vs. peer median of 0.6%). However, the company booked a level of accruals that is around peer median (4.7% vs. peer median of 5.1%) for the same period, suggesting that its reported net income is supported by a reasonable level of accruals.
X-US's accruals over the last twelve months are positive suggesting a buildup of reserves. However, this level of accruals is also around the peer median and suggests the company is recording a proper level of reserves compared to its peers.
Trend Charts
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27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
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