Blue Scope Steel (BSL) Stock Tip of the Day

Blue Scope Steel (BSL) held their 2006 AGM yesterday. The company reported a good start to the year with net profit for the first four months of more than $250 million. Chairman Graham Kraehe said all of BlueScope's reporting segments were profitable over the period. "The first four months trading for Bluescope has been encouraging, continuing the positive July performance," he told shareholders. Macquarie Research Equities (MRE) claims that these comments in regard to the first four months of trading were positive and believe there will be net upgrades. On average, flat steel prices across most regions are up over 20 percent compared to last year. According to MRE, not only are they up but they have also stayed relatively stable compared to volatility seen in FY06 The big fall in steel prices last year had a huge effect on FY06 NPAT into the 2H. The turnaround in steel prices this year has helped to support a strong start to FY07. BSL has some attractive assets but MRE think recent global consolidation highlights that North America and Europe appear to the regions of most interest. At these levels MRE think BSL needs large upgrades just to hold its current rating. "BSL remains a steel pricing story. If steel prices stay high or improve, earnings will also improve. The real surprise and bright spot in the AGM comments is the performance of the Australian Coated Products business. Despite all this the stock looks to be at fair value and MRE do not think the takeover story is strong enough to see the stock move beyond the mid-$8.00 per share."

Blue Scope Steel Limited is listed on the Australian Stock Exchange (ASX) under stock code BSL. You can view their investor website here. BSL was listed on the ASX on 15 July, 2002. Graham Kraehe is the Chairman for Blue Scope Steel (BSL). BlueScope Steel is the leading steel company in Australia and New Zealand, supplying a large percentage of all flat steel products sold in these markets. They specialise in the production of flat steel products, including slab, hot rolled coil, cold rolled coil, plate, tin plate and value-added metallic coated and painted steel products. Their steelworks at Port Kembla in New South Wales is the largest steel production facility in Australia and one of the world's lowest-cost producers of steel products. Read previous news and stock recommendations for BlueScope Steel (BSL). Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. Check your charts and good luck with your share trading!