X - Embedded Expectations Analysis - 2020 07 13
United States Steel Corporation (X:USA) is currently trading at a historical low relative to UAFRS-based (Uniform) assets, with a 0.3x Uniform P/B, implying expectations for profitability to remain muted. Moreover, management may be concerned about their costs, their iron ore operations, and the Stelco JVSpecifically, they may be concerned about the potential impacts of the coronavirus and the potential of a possible cost-sharing joint venture (JV) with Stelco. Furthermore, they may lack confidence in their ability to increase efficiencies and remove cost through their facilities, improve their cash conversion cycle to industry-leading levels, and sustain strong volumes in their packaging business. Additionally, they may be overstating their structural length in iron ore pellets, and they may lack confidence in their ability to generate capital through working capital release from their core business
United States Steel is a steel producer of flat-rolled and tubular products with production operations in the United States and Europe. The company is also engaged in railroad services and real estate operations. The company's segments are: North American Flat-Rolled, which produces slabs, strip mill plates, sheets and tin mill products; U. S. Steel Europe, which produces and sells slabs, strip mill plate, sheet, tin mill products and spiral welded pipe, as well as heating radiators and refractory ceramic materials; and Tubular Products, which produces and sells electric resistance welded steel casing and tubing (known as oil country tubular goods), and standard and line pipe and mechanical tubing.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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