Another Egyptian steel stock worth looking at

A good fourth to Egyptian steel stocks.
By Markets Chimp

3/18/18 9:52 AM

  • Arguably, the scene of EGX 30 breaking over 17,000 points for the first time ever was not totally inclusive when it comes to all sectors within the market. However, some sectors were lucky enough to receive enough liquidity and look promising. One of these sectors was building materials, mainly iron and steel stocks. While the market is currently focusing on merely 3 of them, namely Ezz steel (EGX: ESRS), Egyptian Iron & Steel (EGX: IRON), and Ezz El-Dekheila Steel (EGX: IRAX), we point to another good fourth.
  • Misr National Steel “Ataqa” (EGX: ATQA) is yer another listed company within the sector. The reason for its lack of popularity is because of its illiquidity (i.e. until recently the free float was only 3.1%). However, the company put on a solid performance during 2017, managing to double its earnings, with a notable boost to the top line. The stock already jumped nearly 100% in 2018 so far, yet it still looks undervalued, trading at very low multiples compared to its peers. The stock trades at Enterprise Value of USD150 per iron ton versus USD500 per ton for peers.
  • More recently, one of the shareholders sold back an amount of 1,000,000 shares, flushing the stock with some liquidity, as we can see in the above chart. Thus, we suggest watching Ataqa closely for any signs of increased presence from liquidity, hinting that its target price could be way above its current market price.

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