28 Nov

An insight into U.S. Steel’s transformation

WRITTEN BY Mark O'Hara

The transformation of U.S. Steel Corporation

U.S. Steel Corporation (X) recently announced a new management structure. It first discussed plans to introduce a new management structure during its 3Q14 earnings conference call. Recently, U.S. Steel released the new structure it will implement across its business starting next year.

An insight into U.S. Steel’s transformation

What’s in this series?

U.S. Steel’s (X) new management structure is another step in the company’s transformation. In this series, we will discuss what this transformation is all about and what steps U.S. Steel has taken toward this transformation. We will also discuss how the new management structure will impact U.S. Steel investors.

In this series, we will learn why this century-old enterprise has to transform itself.

U.S. Steel’s share market returns

There has to be a reason for a company to transform itself. We will analyze this in greater detail in the next part. Let’s first look at U.S. Steel’s stock market performance. The above chart shows the share market returns of U.S. Steel compared to other steel plays.

Share prices of Steel Dynamics, Inc. (STLD) and Nucor (NUE) are very near their precrisis peaks. Currently, both of these companies are part of the Standard and Poors depositary receipt (or SPDR) S&P Metals and Mining exchange-traded fund (or ETF) (XME). U.S. Steel Corporation (X) and ArcelorMittal (MT) still trade at a fraction of their precrisis share prices. Please be aware that we have taken these returns only until August 2013. It was after August 2013 that U.S. Steel started its transformation strategy in a true sense.

But what was the trigger for this transformation? Read the next part to learn more.

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