Total return: 112%
Fortune 500 rank: 378
AK Steel's stellar 2006 stock performance could be due in large part to soaring steel prices and industry consolidation, even as labor problems and a drop in shipments bedeviled the company. But some fundamentals look good. AK Steel reached an agreement with its union and lowered its strike-related costs. The company is expanding production capacity and demand for its flagship flat-rolled steel products is rebounding. Emerging economies are also keeping steel prices sky-high, but no one knows if this will be good or bad for AK Steel. If prices go too high, the company may not be able to offset costs for its raw materials with more price increases.
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