Jim Cramer on Nucor Stock Action: "Very Impressive"

Nucor Corporation (NYSE:NUE) is one of the stocks Jim Cramer recently highlighted. Highlighting the pin action that led to the stock’s rally, Cramer commented:

“When you get strength in GM, that has tremendous pin action, which is how Nucor, the giant steel maker, could rally nearly 3% today. Again, very impressive.”

Nucor Corporation (NYSE:NUE) manufactures and sells steel and related products, including sheet, plate, bar, and structural steel, as well as steel joists, tubing, fasteners, and metal building systems. Cramer discussed the stock in light of tariffs during the June 2 episode. He stated:

“… Higher tariffs by themselves are not a good enough reason to buy the stock. I do not recommend paying up here. I’d rather wait for an opportunity to buy Nucor on weakness again… So why hasn’t Nucor been able to hold on to its gains from positive developments in the past? Simple. While tariffs on imported steel are certainly helpful, they’re not the only thing that matters to this business…

Nucor stock collapsed into the end of last year, giving up all its post-election gains and then some. In December, the Fed decided to pause its rate-cutting cycle after just three cuts. That pause crushed anything economically sensitive, including the stock of Nucor… And honestly, the steel tariffs themselves are a mixed development for Nucor in the sense that they put upward pressure on steel, which is good for Nucor’s average selling price but not necessarily good for demand…

In addition to the steel tariffs doubling, the aluminum tariffs are doubling too… Do not get me wrong, I very much support these steel and aluminum tariffs. I salute them. They aim to defend our producers against foreign dumping, and we know that tariffs are a great way to accomplish that. But just because I support these tariffs as a policy doesn’t mean they’re a good reason to buy Nucor or any other steel maker. The earnings outlook for Nucor, which is what the stock price is based on, depends on a couple of factors…

So here’s the bottom line: Yes, tariffs on steel should be good for Nucor in a vacuum, but we don’t live in a vacuum, people. There are other forces at play here. I’d be much more bullish on Nucor going forward if we just got some clearer signals that the overall economy is doing better and that there will be more demand for building things like cars, homes, and generally more macroeconomic strength. All of that’s more important to Nucor stock than incrementally higher steel prices courtesy of these tariffs.”

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Disclosure: None. This article is originally published at Insider Monkey.