US Steel (NYSE:X)

US Steel (NYSE:X) is bound to profit from the increased construction in China which shows no slowing down. The stock can quadruple before reaching its all-time high near $180 per share. It probably won’t get there anytime soon, but the stock can easily double with the rise in demand for the steel industry as we exit this recession. Take a look at the drop in the long term chart below.

Compared to peer Nucor (NYSE:NUE), US Steel has more upside potential. Nucor, although better run, has a business model based in recycled steel, and is a more stable stock. Nucor is a great long term play that has a nice dividend as well.

Steel Stock Comparison:

US Steel
Current Market Cap: $6B
Earnings in 2008: $2.1B
Nucor
Current Market Cap: $14B
Earnings in 2008: $1.8B

As shown in the table above, US Steel has the potential to earn more than Nucor, yet it is trading at a third of the market cap. I see US Steel as a clear buy.