We came across a bullish thesis on Steel Dynamics, Inc. (STLD) on Substack by Gregg Jahnke. In this article, we will summarize the bulls’ thesis on STLD. Steel Dynamics, Inc. (STLD)'s share was trading at $132.87 as of Feb 10^th. STLD’s trailing and forward P/E were 13.50 and 16.23 respectively according to Yahoo Finance.

A conveyor belt winding its way through a steel production facility.

Steel Dynamics (STLD) is an exceptional business with a strong track record, but finding the right entry point is crucial. Built by former Nucor (NUE) executives, STLD has positioned itself as a superior alternative, benefiting from a more efficient scrap acquisition operation, lower exposure to commodity-grade steel, and a pristine balance sheet, even after repurchasing 30% of its outstanding shares. The company’s growth has been phenomenal, with an 800% stock appreciation over the past decade, and it continues to expand with strategic investments like its new world-class aluminum plant. At just 1.25x EV/Sales, STLD is a better value than NUE, offering a compelling long-term investment case.

STLD operates in an industry deeply affected by trade policies and economic cycles. During periods of slowing global growth, steel is dumped into North America, often bypassing tariffs through complex trade agreements. This reality has placed STLD at the center of policy discussions, as tariffs on Canadian and Mexican imports remain a key issue. The company’s leadership has been vocal about the industry’s challenges, and unlike short-term-focused analysts, STLD’s chairman has emphasized the company’s long-term strength.

However, timing an investment requires caution. The company’s recent strong performance was partly driven by preemptive purchases ahead of potential tariffs. Meanwhile, challenges remain, including lingering issues at its Sinton, Texas plant, slower auto sales, and uncertainties in government spending. While STLD’s fundamentals remain strong, waiting for first-quarter earnings may provide a better entry point. The stock may face near-term headwinds, but its long-term trajectory is promising. If economic conditions stabilize and trade policies remain favorable, STLD’s resilience, operational efficiency, and strategic growth initiatives could make it a significant long-term winner.

Steel Dynamics, Inc. (STLD) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held STLD at the end of the third quarter which was 34 in the previous quarter. While we acknowledge the risk and potential of STLD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than STLD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.