Shares of AK Steel Holding Corp (AKS) finished Wednesday's trading session higher by more than 10%, despite the lack of any major news.
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Broad Market Rally
One reason why AKS moved higher Wednesday was the rally in the broad market indices. AKS has a high beta of 2.56, so the stock likely benefited from the nearly 1% move higher in the Dow and S&P 500.
AKS Leads Steel Sector Higher
As shown by the chart below, AKS was the leader on Wednesday by a significant margin. While Nucor (NUE), Steel Dynamics (STLD), United States Steel (X), and the steel ETF Market Vectors Steel Index Fund (SLX) all moved higher, AKS was the standout. It should be noted that the second biggest winner was United States Steel. This is noteworthy because AKS and X have a much higher short interest than the rest of the steel sector. This likely means that a good part of Wednesday's move in X and AKS was driven by short covering.
- AKS: 29%
- X: 26%
- STLD: 2.7%
- NUE: 4.3%
My opinion on AKS remains unchanged from my previous commentary, I would avoid the name. There are better ways to invest in steel, my favorite way is through Nucor as I believe it is the highest quality steel company.