Bolling's Triple Play: Hot Rolled Steel 5/14/08
Editor's Note: Eric Bolling is new to TheStreet.com. A top Wall Street trader and an on-air television personality for the Fox Business Network, Bolling specializes in commodities, technology, resource trades and ETFs. He will provide regular picks in his column.
There have been only 14 or so unassisted triple plays in modern Major League Baseball history ( 107 years or so of it ). However, I would credit the perfect game (15 times in history of the Majors) and hitting four dingers in a single game (15 times) as monumentally more heroic, even if they are slightly more frequent.
That being said, it is still an interesting sequence of fates that have to be present in order to score an unassisted triple play. There has to be no outs in the inning and at least two men on base. Then, the batter must hit a line drive to a fielder covering a base because a runner is stealing, putting the fielder in the right place at the right time to make all three put-outs.
Two weeks ago I ran a 'Bolling For Dollars' segment on Fox Business called 'Ironman Investing.' I talked about the strong prices for "hot rolled steel, baby." I outlined why I felt U.S. Steel(X - Cramer's Take - Stockpickr), Mittal(MT - Cramer's Take - Stockpickr) and Vale(RIO - Cramer's Take - Stockpickr) were positioned for a run. Little did I know that we were on the verge on an unassisted triple play. But here's how it's playing out.
Line drive: 1 out. There is no doubt about the awesome growth picture in the emerging economies around the world. Hot rolled steel prices have continued their torrid ascent as the world is demanding more and more steel for infrastructure, buildings and massive increases in automobile ownership in the new Chinese economy.
Put out: 2 out. The oil industry is one of the biggest customers of the steel industry. Why? It buys tubular steel for a wide range of uses. The most obvious is the drilling deeper and deeper into the ground, sea or wherever they think they might find the stuff that goes for $125.85 per 42-gallon drum. Pipeline companies pipe the slick stuff from location to location and need steel for that. And finally, the refiners need steel for those much publicized antiquated refineries. The bottom line is that a customer with a fat wallet is good.
Put out: triple play complete. If all the news so far wasn't good enough, this finishes it. U.S. Steel recently decided to raise prices and analysts upgraded them. Wow, I guess the demand for the product is so strong they can not only add input cost surcharges, but they get The Street to applaud the move. I will bet the higher price sticks for a while even if the steel market gets soft (but, there seems to be nothing like that on the horizon).
The triple stock play was and is U.S. Steel, based on its pricing power, Street sweetheart status and customer base. I also highlighted Mittal because of its strong presence in the emerging Indian and Chinese economies. It is also going to benefit from the U.S. Steel price change. And finally, I have always loved RIO. If you don't have iron ore, you can't make steel, and RIO is the world leader in iron ore mining. It accounts for 17% to 20% of the world production of iron ore (depending on who you talk to). This stock has been a Bolling fave for years and until things change in the commodity market, I will continue to like RIO.
As it turns out, all three of these steel plays settled at the all-time highs yesterday. Remember..... "it's only their all-time high...for now!"
Hot rolled steel is an unassisted triple play in my book.
At time of publication, Bolling was long RIO and X, although holdings can change at any time.
Eric Bolling is a host on the new Fox Business Network. Bolling was one of the developers and original panelists (nicknamed "The Admiral") on CNBC's "Fast Money."
Bolling is an active trader specializing in commodities, resource trades and ETFs.
Bolling is a member of several exchanges including The New York Mercantile Exchange (NMX), The Intercontinental Exchange (ICE) and The Commodity Exchange of New York.
After spending 5 years on the Board of Directors at the NYMEX, he became a strategic adviser to that Board of Directors where he assisted in bringing the company (NMX) public. He has been included in Trader Monthly Top 100 in 2005 and 2006. Bolling was the recipient of the Maybach Man of the Year Award in 2007 for his contribution of philanthropy and willingness to de-mystify investing to Main Street.
Bolling graduated from Rollins College in Winter Park, Florida and was awarded a fellowship to Duke University. Bolling was an accomplished baseball player. He was drafted by the Pittsburgh Pirates where he played before his career was cut short due to injuries. He honors his baseball past by sporting the NYMEX trader badge, R.B.I.
