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WHAT ARE WE LOOKING FOR?

Hot steel stocks

Soaring steel prices amid tight supply have sent the Van Eck Market Vectors Steel exchange-traded fund on a tear over the past year.

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Steel stocks have benefited from takeover activity and from emerging markets such as China and India, which are developing their infrastructures.

MORE ABOUT THE ETF

The ETF, which trades under the symbol SLX on the American Stock Exchange, includes common stocks and American depositary receipts of companies involved in the steel sector.

The fund includes steel makers, and also mining giants like Anglo-Australian Rio Tinto PLC, which is an iron ore supplier to the steel industry.

This week, Rio Tinto and China's largest steel maker, Baosteel, agreed on the highest price increase for iron-ore contracts in at least a decade.

Rio secured a price rise of up to 96.5 per cent from Baosteel compared with the 65- to 71-per-cent increase negotiated between Asian mills and Brazilian miner Vale in February.

The fund, which was launched in October, 2006, tracks the Amex Steel Index. The ETF has climbed 57.4 per cent over the past 52 weeks. It closed at yesterday at $102.79 (U.S.) on the American Stock Exchange.

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MORE ABOUT TODAY'S SCREEN

For investors who want to examine one particular hot steel stock, we used Thomson to screen for stocks with the strongest earnings growth for the next fiscal year. Some stocks have suffered a pullback, and could be an entry point for longer-term investors.

Van Eck Market Vectors Steel ETF's top 20 EPS growth for next fiscal year

Ticker Company Country US $ Price June 25 1-mo % chg Fiscal yr. end date EPS % gwth this fisc yr EPS % gwth next fiscal yr P/E on last yr's EPS P/E on next yr's est. EPS P/E on this yr's est. EPS % div. yield
CLF-N Cleveland Cliffs US 113.27 20.8 Dec-07 142.8 72.5 44.07 18.15 10.52 0.3
CMC-N Commercial Metals US 39.00 12.0 Aug-07 -18.4 50.2 13.36 16.36 10.89 1.3
SID-N Sid Nacional BR 43.87 -11.3 Dec-07 60.5 40.1 22.73 14.16 10.11 NA
WOR-N Worthington Ind. US 23.93 24.9 May-07 -8.7 31.9 18.27 20.00 15.17 3.1
RIO-N Cia Vale Do Rio BR 36.68 -10.6 Dec-07 30.1 29.8 15.16 11.66 8.94 NA
GGB-N Gerdau BR 23.90 -2.9 Dec-07 50.4 27.0 21.83 14.51 11.43 0.6
RTP-N Rio Tinto GB 460.83 -8.8 Dec-07 63.3 26.9 19.91 12.19 9.61 1.3
CAS-N Castle (Am) US 29.10 -7.6 Dec-07 1.8 24.5 12.07 11.86 9.52 0.8
AKS-N AK Steel Holding US 66.40 -1.3 Dec-07 44.0 16.4 19.76 13.72 11.79 0.3
SCHN-Q Schnitzer Steel US 109.82 14.5 Aug-07 39.5 13.9 25.42 18.22 15.99 0.1
TKR-N Timken Co. US 34.48 -4.8 Dec-07 21.9 13.6 14.37 11.79 10.38 1.9
CRS-N Carpenter Tech. US 45.91 -19.6 Jun-07 3.1 13.2 10.64 10.32 9.12 1.5
X-N US Steel Corp. US 191.96 11.5 Dec-07 89.4 11.7 21.94 11.58 10.37 0.6
ATI-N Allegheny Tech. US 61.36 -17.5 Dec-07 -10.8 11.1 8.45 9.47 8.52 1.1
MT-N ArcelorMittal LU 99.74 -0.1 Dec-07 26.0 8.2 13.48 10.69 9.88 1.3
NUE-N Nucor Corp. US 77.18 6.8 Dec-07 41.1 7.9 15.62 11.08 10.26 1.7
STLD-Q Steel Dynamics US 39.87 11.1 Dec-07 66.6 7.4 19.50 11.70 10.89 1.0
TX-N Ternium LU 41.70 -3.9 Dec-07 34.6 5.5 10.66 7.92 7.51 1.2
RS-N Reliance Steel US 75.59 14.0 Dec-07 21.4 4.6 14.10 11.62 11.10 0.6
GNA-N Gerdau AmeriSteel CA 19.44 12.1 Dec-07 11.2 0.9 11.78 10.59 10.50 1.8
MTL-N Mechel OAO RU 49.37 0.4 Dec-07 132.7 0.5 22.54 9.69 9.52 1.8
ZEUS-Q Olympic Steel US 71.73 15.3 Dec-07 147.1 -9.0 30.52 12.35 13.57 0.2
PKX-N Posco KR 130.16 -0.5 Dec-07 -10.4 -10.0 10.18 11.37 12.62 1.7
ESMK-Q Esmark Inc US 20.47 11.0 NA NA NA NA NA NA NA
SIM-A Grupo Simec MX 17.44 14.9 Dec-06 NA NA 11.11 NA 13.73 NA

SOURCE: THOMSON REUTERS

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