Readers of this space know that my investment bias is toward large-cap companies with demonstrated business models and a competitive advantage in established markets, preferably with a favorable global trend as a support. With this in mind, Steel Dynamics is worth a review.

Steel Dynamics (NASDAQ: STLD) operates five electric arc furnace mini-mills and six steel fabrication facilities. STLD's customers include companies in the automotive, construction, and manufacturing industries, as well as steel processors and service centers, primarily in the Midwest U.S.

Analysts expect Steel Dynamics to post robust, 45-55% revenue growth in F2008, after an impressive 27% rise in F2007. Analysts also expect continued, strong demand for structural and bar products, and a recovery in STLD's flat-rolled steel business.

Further, analysts also say the sector's sales volatility will decline over the life of the business cycle, as a result of consolidation/mergers. STLD's strong balance sheet and low cost structure add to the favorable picture. The Reuters F2008/F2009 EPS consensus estimates for STLD are $5.30/$5.65.

The risks? A failure of the flat-rolled segment to recover would obviously hurt STLD's results.

The First Call mean rating for STLD is: Buy [11 firms]. Mean 2008 target: $61 [high: $80, low: $50].

Stock Analysis: Steel Dynamics is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from STLD's shares. Sell / Stop Loss if you were to purchase shares in this company: $38.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.