ArcelorMittal has declined by about 3% this year, underperforming the broader indices amid mixed performance of the steel sector. Steel prices have softened a bit this year, amid easing supply chain issues and lower commodity price inflation following the Fed’s rate hikes over the past year. Moreover, the company’s Q2 2023 results were weaker than expected as the company witnessed price erosion and weaker year-over-year shipments. Revenues were down by 16% year-over-year to $18.6 billion, with earnings coming in at $2.21 per share, down from $4.25 per share in the year-ago quarter. The company’s average steel price realizations were down by about 16% and shipments were down by 1.7% due to outages in France and Spain.
Interestingly, ArcelorMittal has had a Sharpe Ratio of 0.2 since early 2017, behind the 0.6 for the S&P 500 Index over the same period. This compares with the Sharpe of 1.3 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
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