1. AK Steel (AKS) has dropped quite a bit over the last few weeks. The steelmaker has shed almost 25% of its value since April 6th. Shares have dropped due to increasing iron ore prices and a sketchy forecast for the next two quarters. It may take a few quarters for shares to rebound but the current price for AK Steel has gotten my attention. Shares were last trading at $18.91 in the after hours market. Iron ore may cut into the firm’s short term profits but sales are still strong as noted by the Q1 earnings. The lowest analyst estimate for AK Steel’s 2011 earnings is $1.30 which would mean that shares are trading at 14.6 times earnings even with the most pessimistic forecast.

2. Goldman Sachs (GS) is in the midst of a media nightmare. The investment banking firm is facing potential lawsuits and tighter regulatory scrutiny. Investing in Goldman is a long term endeavor. It may take a year or a year and a half but Goldman will survive the media storm and find a new way to boost earnings. Goldman is always ahead of the curve and there is no doubt that the firm’s trading desk will find new ways to make money. If investors get a chance to buy shares anywhere near the $115 warrant price that Buffett owns, then they should buy shares.

3. Citigroup (C) is finally looking like a good buy. Wait for the government to unload its shares onto the market. As the government unloads stock, shares of Citigroup should decline giving investors an opportunity to buy. The government is preparing to unload its 27% stake in Citigroup beginning with the sale of $7.7 billion shares in Citigroup stock soon. The government will make a profit as long as shares are sold above $3.25. Investors should be able to buy the stock in the mid to high $3 range.

Disclosure: I own shares of Goldman Sachs. I previously owned AK Steel but sold off my position at $25.

Photo by: TreyDanger