The steel processing sector was one of those fields that was rudely treated by Wall Street as the U.S. and global recessions took hold, and niche player Worthington did not escape the aforementioned.
In the spring, the sector's fundamentals suggested that a bottom in processed steel demand was forming, and WOR's stock responded accordingly, rocketing above $16 from about $7. Since that time, however, the stock has pulled-back and now looks to have to formed a double-top, technically. Still, until the stock breaks the uptrend line at about $12, no definitive conclusion regarding the stock can be made.
Hence, the Sell/Stop Loss has been revised higher to $9, or to just below the uptrend line and the $10 psychological support level, from $5.
The First Call FY2010/FY2011 EPS estimates for WOR are 53 cents to 86 cents.
Stock Analysis: Don't Buy Worthington Industries' shares at at this time. If you bought shares in June, Hold the shares. Revised Sell/Stop Loss: $9.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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