SCHN: Commodity Stocks Still Look Good To Me
Commodity stocks – along with the rest of the market – have been bludgeoned over the last couple of months as investors price in an extremely hawkish Fed. But earnings from Schnitzer Steel (SCHN) this morning suggest to me that commodity stocks are still poised to do well going forward.
SCHN’s revenues were +23% to $1,010 million while adjusted EPS was +18% to $2.59 for the quarter ended May 31, 2022 – and that’s against tough comps. Steel pricing was strong in all categories. I can’t see SCHN earning less than $6/share in its FY23 which means it’s trading at 5x forward earnings.
I remain convinced that inflation plays like commodities, consumer staples, healthcare and utilities remain the place to be – despite the brutal correction they’ve suffered of late.