Go With Goldman (X)

Yesterday Goldman Sachs GS put U.S. Steel X on its coveted "Conviction Buy" list. In the world of equities, this is akin to getting one's name on the list to attend the Academy Awards. But I digress.. Goldman's call was predicated on two things: an economic recovery, and U.S. Steel's unique competitive advantage relative to its peers. U.S. Steel predicted a return to profitability this quarter on the strength of an improving world economy. More importantly, the company is also vertically integrated, so that it will benefit more than its competitors as steel prices rise. U.S. Steel has its own iron ore in the Iron Range of Minnesota. As prices for iron ore and coking coal rise, the price of steel rises. U.S. Steel has fixed raw materials costs, so any rise in steel prices will expand the company's margins and flow to the bottom line. Goldman set their six-month price target on shares of X at $73. Yesterday shares of X traded as high as $57.96. Today shares are down 7% to $52 on European debt and growth worries. Savvy investors should stick with Goldman on this name and ride U.S. Steel to strong returns.