Steel is on sale: Nucor, Cleveland-Cliffs and more

Nucor Corporation (NYSE:NUE) is down 14% in the last 5 days and Cleveland-Cliffs Inc (NYSE:CLF)  down 17% since Monday.  All thanks to speculation and a Bloomberg article and down the big boys go.  Today, those stocks are being bought back in a hurry, gitty up Masters.

Even United States Steel Corporation (NYSE:X) took a 15% hit this week.

Hate your stocks right now, perfect, this an opportunity to gain an attractive entry point in a group with strong fundamentals that should see record high earnings in both 2Q and 3Q.

JP Morgan believes most steel stocks warrant a strong rebound, firm's top picks in the group are Cleveland Cliffs (CLF), Nucor (NUE) and US Steel (X).

There is mixed reviews on the future of steel prices, but going for best of breed in this sector is why we are not mentioning other players like Metalico Inc (MEA) who have been raked over the coals this past week.

Keep your eye on this sector America, do some reasearch, and start with a small position to ensure the damage has been done.

On Monday (6/30) shares of Cleveland-Cliffs Inc. touched an all-time high after a Deutsche Bank analyst raised his price target on the iron ore and coal mining company.

In a note to investors, Jorge Beristain raised his price target on shares of the Cleveland-based company to $150 from $115. The new target implies he expects shares to gain 35 percent in the next 12 months over Friday's close of $111.32.

Beristain credited the increase to sharply higher estimates for iron ore and coal prices. Previously, Beristain said he had expected a 65 percent increase in fines, or crushed ore, prices in the Asia-Pacific region for the company, but London-based Rio Tinto recently announced even higher price increases to Chinese steelmakers.

He raised his 2009 price increase estimates for several commodities as well, including iron pellets and fines and expects higher realization prices for Cleveland-Cliffs from coking coal. He reiterated his "Buy" rating on the company.