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Stelco is a Canadian steel company (TSX: STLC) (OTC US: STZHF) that benefited from the tailwinds of the steel price uptrends.

[Image: Chart-1.png]

But steel prices are cyclical and as it comes down, so will Stelco's performance. You can see the trends in the chart below.

[Image: Chart-2.png]
So if you are a fundamental investor, you should be looking at the performance over the cycle rather than just one of two years of results.

I did such an analysis and valuation for Stelco and found that there is no margin of safety at the current price.

I am a long-term value investor holding onto stocks for 8 to 10 years. I like cyclical companies because they can give repeated opportunities. If you want to know more how I handled cyclical companies, refer to How to overcome issues when valuing cyclical companies

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