Friday, November 30, 2012

AK Steel Holding Corporation (NYSE:AKS): Analyst Raises Rating On AK Steel, Wainscott Purchases

The investment analysis company, Dahlman Rose & Co., has raised its rating on AK Steel Holding Corporation(NYSE:AKS)’s stock to ‘Hold’ from ‘Sell’. The change comes after AK Steel’s stock price went up sometime in mid-November. The shares lost 1/3rd of their worth in 4 days through 15th November after the steel manufacturer based in West Chester said that it would take a huge fourth quarter loss owing to poor steel prices and an income tax charge.

In addition, James Wainscott, the CEO has purchased 100,000 shares on Tuesday in lieu of $384,500. That comes after stock purchases by 3 AK Steel insiders over a period of two trading days after Thanksgiving Day. Analysts frequently see insider buying as optimistic for the stock.

It definitely seems the case now. Between Wainscott’s purchase and the upgrade, AK Steel’s shares rallied 21 cents to $4 in mid-afternoon trading on Wednesday.

The directors of a company often have the tendency of having a distinctive inside view into the business, so when directors make big purchases, investors are wise to notice that. Perhaps, the sole reason for a director of a company to opt for using their hard-earned cash to purchase stock in the open market is that they expect to make profit.

Average cost of Wainscott works out to $3.85 per share. On Wednesday, bargain hunters could purchase shares of AK Steel and get a cost basis lower than Wainscott with shares changing hands as $3.82 for each share.

AK Steel Holding Corp. has completed securities offerings of %588 million before underwriting fees and other associated expenses.

The offerings take into account $350 million of 8.750% senior held notes due 2018 and $150 million of 5% exchangeable senior notes due 2019.

Wainscott has stated that these offering are a part of the company’s strategy at AK Steel to bolster the company and increasing value for its investors.

Shares of AKS have jumped 16% in the past one week, but still down 50% so far this year. 

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