Should You Buy BlueScope Steel Ltd at This Share Price?

What happened to the BSL share price?

BlueScope Ltd [ASX:BSL] was up strongly in today’s trading. The ASX was higher from the previous day, with most of the gains locked in at the open. The European and the US markets were mixed overnight. Today, Asian markets are also mixed, with Shanghai slightly down.

Why did BSL shares do this?

BSL is one of the best performing stocks in the last 26 weeks. This qualifies BSL as a strong momentum stock. However, the fundamentals of BSL are also very strong. The average rating on the stock is ‘Outperform’. Market analysts see rising top-line performance in the company this year and the next. They also anticipate a positive growth in earnings.

The company has a fairly cheap P/E multiples. Its beta is higher than the market. It pays a dividend, which increases the overall return in the stock. The payout ratio of this dividend is however below industry average.
The company enjoys a bigger-than-one current ratio and a low level of debt. These are good signs of low liquidity and low credit risks.

What now for BSL?

BSL has been on my trading portfolio this week. Its positive performance this week continues to make it attractive. However, some of its movements this week were attributed to the beta. BSL is not a top momentum stock in the ASX universe; I usually switch in and out of the stock between different periods. I recommend investors to remain agile on the stock.

Ken Wangdong
Emerging Market Analyst, New Frontier Investor

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