In short: His other larger-cap pick: world's #2 steelmaker, top competitor in US/Europe/Brazil/India. A "capital-intensive crappy business" that actually gushes free cash flow — buys back stock (~35% of shares in 6 yrs), pays dividends, makes smart acquisitions (just bought out Nippon's stake in a North American JV to grow its US footprint).
ArcelorMittal is the world's second-largest steelmaker, a top player in the U.S., Europe, Brazil and India (where steel demand is set to surge). People dismiss steel as a lousy, capital-hungry business — but Robotti's point is that this one actually generates far more cash than it needs to run.
It uses that excess wisely: it has bought back about 35% of its shares in six years, pays dividends, and makes shrewd deals — recently buying out Nippon Steel's stake in a North American venture to expand its U.S. footprint, where cheap energy and home-grown raw materials (met coal, iron ore) make steelmaking both cheaper and cleaner.
52:43And the other one is steel, I think is something that on a basis makes a lot of sense. ArcelorMittal is the second largest steel company in the world. It does business in US, Europe, Brazil and in each of those markets it's one of if not the top competitor, and it does it in India and of course the Indian market's in the process of exploding over the next number of years.
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