Arcelor Mittal my first investment 09.15.2015
My first investment is Arcelor Mittal. A large company, a leading global steel production, which has seen its market value. Currently it is trading 30% above its book value.
The company has been heavily penalized by the drop in sales of steel, which has led to accumulated losses in recent years and present some very bad ratios. However, in my opinion the company has been restructured and this along with the economic recovery will make the price of the company increased. At least up to 100% of its book value, ie its price pass of 6’93 today to 20.
My recommendation is to buy Arcelor Mittal MT options: 10,000 shares on NYSE, 8 maturing January 20, 2017, listed to 1.07. That is, we pay 10,700 dollars for the options.
We analyzed the ratios of Arcelor Mittal in which we draw:
P/E: N/A. The company has had losses, but in the last quarter has shown benefits.
EPS: -0’84 in previous periods, the company has had losses.
P / BV 0’30. The company is highly penalized in stock, trading at 30% of its value. This is what makes me more attractive company. I’m paying for it less than what it would sell for parts. This is my main ratio for deciding on an investment. Buy low, sell high.
Debt: 0.96. The debt of the company is not excessively high.
Altman Z-score: 0.51. This ratio would indicate imminent bankruptcy of the company. But I do not agree with his prediction because the debt is correct.