Do you think these cheap blue chips have the potential to go higher?
Caterpillar (CAT), Deere's (DE), AK Steel (AKS), Allegheny Steel (ATI), Nucor (NUE), U.S. Steel (X), Vulcan Materials (VMC), and Martin Marietta Materials (MLM)
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2222 points
readytoretire answered 11 months ago …
I think they do. Cat and Deere will benefit from the stimulus bill, as will Vulcan and Martin Marietta Materials. As they build, the steels will gain. The steels are trying to raise prices, will have to wait and see if it holds. Long term, these are good stocks. When they start up will depend on the economy versus the stimulus.
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2082 points
alanj answered 11 months ago …
Blue chip companies are blue chip because they are well run companies. If they weren't they wouldn't be blue chip companies. They are cheap because of the economy not because of the way they are being run. The cheaper they get the more potential they will go higher, eventually. They can only go down for so long. They will go up. Warren Buffet has used this strategy his entire investing life and it has served him well.
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3963 points
MNSL answered 11 months ago …
Some research firms downgraded these stocks during 4rh quarter of 2008.
Yes these cheap blue-chips have the potential to go up in the long run provided there is a demand for their products in the future.
I do not think some blue chips will recover. However some small and medium size global companies will become blue chips in the next decade. Current mess is completely different from the past. As a result of this even some small and medium size companies in some sectors will become global leaders in the next 10 years.
Not all the global blue chips companies are well managed. Some blue chips have become unsuccessful in their businesses. As long as economy is doing well they are making money. Sometimes they over invest in wrong sectors. Some blue chips have become bankrupt.
