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

Nucor Corporation (NYSE: NUE) produces about 20 million tons of steel annually, and also is a major recycler of scrap metal.

In general, analysts expect NUE's revenue to increase 10-12% in FY 2008, aided by the Harris Steel acquisition and other acquisitions. Analysts also see strong demand for beams and bars, on continued non-residential construction growth.

Further, there's also a sense that distributors will rebuild inventories heading into 2009, after drawing down on inventories for about 12 months, as the U.S. economic slowdown commenced. Overall margins should improve FY 2009. The Reuters FY 2008/FY 2009 EPS consensus estimates for NUE are $6.74 to $6.90.

The risks? A failure of a demand recovery from distributors will hurt Nucor's results. Analysts are also keeping an eye on Nucor's skilled labor costs.

The First Call mean rating for NUE is: Buy [13 firms]. Mean 2008 target: $78 [high: $90, low: $55].

Stock Analysis: Nucor Steel is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from NUE's shares. Sell/Stop Loss if you were to purchase shares in this company: $57.

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.