AK Steel Holding CorporationAKS

Morningstar Rating

Stock Research and Analysis

by Joung Park

Having survived the last major industry downturn in 2003, AK Steel exhibits extra caution in managing its balance sheet and preserving cash. After steel demand recovers, we believe the firm will reap the benefits of its fiscal conservatism and its focus Read more

Bulls Say

AK Steel won union concessions that generated millions in cost savings and made its cost structure more flexible.

The company bought out an OPEB liability and converted to a defined contribution pension program, effectively topping out its pension liability.

AK Steel's plants and high-quality product profile make the firm an inviting target in the ongoing steel industry consolidation. Read more

Bears Say

Raw material is increasingly a challenge for a firm of AK's size. As steel companies consolidate and integrate upstream, more raw-material sources are controlled by competitors.

The price of stainless and flat-rolled steel underperformed that of long steel because of more flat steel capacity built in China.

The government stimulus package has less effect on AK Steel because the firm's products are more geared toward the auto and appliance industries. Read more

Strategy

AK Steel has aggressively cut costs and maintained a clean balance sheet in order to stay competitive and better mitigate the effects of cyclical downturns. Having successfully renegotiated various union Read more

Management

CEO James Wainscott took over in 2003 when the firm was on the brink of bankruptcy. He wasted no time initiating talks with labor unions and took a tough stance in bringing down labor costs. Current management deserves the credit for turning around Read more

Profile

Ohio-based AK Steel is a leading producer of flat-rolled carbon, stainless, and electrical steel and tubular products. Its products are sold primarily to the automotive Read more

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