One would think that the company would be making headline news after returning over 360% in the last 52 weeks. However, this high-return stock is not very popular among investors. The majority of today’s stock market players seem to prefer the latest technology or cutting edge pharmaceutical stock to this top performer.

In fact, the entire sector has fallen out of favor due to years of underperformance and lackluster returns. But things are changing and changing quickly. Investors who caught this trend early have earned handsome profits, but don’t worry — there are still plenty of profits to be made by risk-embracing investors.

#-ad_banner-#Rest assured, I’m not talking about flash-in-the-pan, sky-high-return penny stocks with shady marketing, or questionable biotech stocks with “miracle cures.” This company has existed for over 115 years, and counted many of them as the market-leader. It boasts revenues of nearly $12 billion annually and a market cap of almost $7 billion. I can’t think of many companies further away from the penny stock arena.

The company is Pittsburgh-based steel company U.S. Steel (NYSE: X).  Once one of the leading industrial firms in the nation, the company has suffered since the 1980s due to cheap imports. It has tried to reinvent itself on several occasions but always goes back to its steel making roots.

On February 1, the company reported mixed numbers for its fourth quarter ended December 30 2016, showing earnings of $0.27 per share.

This represented a huge surprise over projected earnings of $0.01 per share. Revenue just missed projections for a 3.1% gain, coming in at $2.65 billion.

The first factor that triggered my bullish tilt for 2017 is the fact the company projects earnings of $3.08 per share in 2017’s neutral economic environment. Even better, with the fiercely protectionist policies of the Trump administration, things could radically improve for U.S. Steel. The promise of ramped-up infrastructure spending over the next four years paints a very bullish picture for domestic steel firms.

Argus analyst David Coleman echoed my bullish proclamation. He he advised Barrons, “Although we downgraded U.S. Steel in late November on signs of slowing price momentum, we note that earnings estimates are again rising following the company’s bullish 2017 guidance. We expect U.S. Steel to return to profitability this year with help from stronger pricing, continued cost reductions, and tariffs on imported steel. We also expect it to benefit in 2017-2018 from increased infrastructure spending under the Trump administration.“

The Bloomberg Americas Iron/Steel Index, which tracks 15 North and South American steelmakers, soared 86% in 2016, marking the largest annual gain for the last 13 years. Prices have risen over 50% for hot-rolled domestic steel on the Trump administration’s infrastructure spending promises.

The second bullish driver is Trump’s push for U.S. materials to be used in pipeline projects. U.S. Steel CEO Mario Longhi explained to CNBC, “The American manufacturing base on steel is fully prepared to supply what is needed for the pipelines and for the general infrastructure projects that are certainly going to come.“

Next, steel prices were depressed due to an overly bullish forecast for met coal. Prices were expected to climb $30.00 this year, but are now only projected to advance $19.00. This should help keep manufacturing prices from skyrocketing this year.

Finally, the company recently declared a $0.05 per share dividend, which is in line with the last dividend, indicating confidence going forward into the rest of 2017.

Risks To Consider: Despite the very bullish catalysts, make no mistake, there is risk in U.S. Steel stock. The first major risk is the slowdown in U.S. auto production. Latest numbers indicate a greater than 10% slowdown in the industry. Should this continue to worsen, it may have negative consequences for the steel industry.

Second, Chinese debt leading to a collapse in overnight lending could hurt commodity prices across the board weighing on the steel business. Axiom Capital published a study indicating China produced 1.4% more steel in December, month over month, and up 4.4% in December year over year. Output in 2016 rose 1.6% year over year. The analysts at Axiom have an underweight rating on metals, mining and mining equipment.

Finally, Trump’s infrastructure rhetoric remains unproven. Caution is advised when investing in U.S. Steel due to the uncertainty of the macroeconomic picture.

Action To Take: While I expect U.S. Steel to be a high-return industrial stock in 2017, I do not expect another 300% price move. It is more likely we will see a move of around 20%. My target price on the shares is $42.00 and initial stops are suggested at $31.93 per share.

Editor’s Note: Bank on the “Rust Belt Revival,” the next big “Boomer” Phenomenon, or just cash in on “2017’s biggest Win-Win” the choices (and the profits) are all yours. Check out the list here…