Jim Cramer said on a recent episode of “Mad Money” that selling Nucor (NUE) – Get Nucor Corporation Report now, after a downgrade of the stock by Goldman Sachs (GS) – Get Goldman Sachs Group, Inc. (GS) Report, would make no sense as it would miss all the upside potential of the company.
Recently, Goldman Sachs downgraded U.S. Steel to ‘sell’ from ‘neutral’ and Nucor from ‘buy’ to ‘neutral.’
Nucor stock sailed to highs in August, but shares have dropped 20% since. But looking back at the past year, the stock is up more than 80%.
On Real Money, Bruce Kamich looked at possible trading levels for Nucor. “Traders who bought NUE last month should continue to hold with the same $89 stop,” Kamich wrote. “Goldman Sachs may have a technical analyst somewhere in the firm but I doubt they will weigh in on NUE.”
Leon Topalian, president and CEO of Nucor, told Cramer the steelmaker’s best days are ahead of it thanks to strong secular trends pulling in its favor and innovation at the company. He said the green and digital economies will be built with steel, and Nucor is at the forefront of both innovation and green technologies.
Topalian touted Nucor’s newest plant, the world’s first net-zero steel production facility. The plant is just a part of what makes Nucor the cleanest steel producer on the planet.
Nucor isn’t getting bigger for the sake of getting bigger, Topalian said, it’s getting bigger to better serve its customers. The company has been making strategic long-term investments, which is why companies like General Motors (GM) – Get General Motors Company (GM) Report count Nucor as a partner.
Cramer said there is still a lot that could go right for Nucor. The company’s steel is still in high demand for autos and pipelines and that’s not even counting the possibility of infrastructure spending from Washington. Nucor is also buying back stock and returning capital to shareholders, all of which makes Nucor a strong company in Cramer’s view.