Gerdau Ameristeel Corp.

Gerdau Ameristeel Corporation (GNA - Snapshot Report) produces mini-mill steel in North America. The company operates 19 mini-malls, 19 scarp recycling facilities and 65 downstream operations and has customers in the United States and Canada.

Since we last reviewed Gerdau Ameristeel on Feb 15, the stock has soared 98% as of the July 10 close.

Gerdau Expanding Jacksonville Recycling Mill

On July 3, GNA announced it had obtained approval for its previously announced expansion of the Jacksonville Recycling Mill. The expansion will allow for an additional 1 million tons per year in rebar products.

The company intends to service customers in the greater Southeast and Southern regions of the United States with the additional capacity.

Consensus Estimates Rising

Brokerage analysts have been raising second quarter and full year estimates as the steel sector remains strong. Second quarter estimates are up 4 cents in the last 60 days to 47 cents from 43 cents per share. One analyst raised estimates in the last week.

For the full year, estimates are up 8% to $1.80 from $1.66 per share in the last two months.

Value Fundamentals Still Intact

Gerdau Ameristeel's forward P/E is still only 9.52 despite the recent surge in the stock. Its price-to-book is 1.94. GNA's one year return on equity (ROE) is 18.87%. It also pays a dividend with a yield of 0.50%.

GNA, a Zacks #1 Rank (Strong Buy) when we last reviewed it and now a Zacks #2 Rank (Buy), has surprised on earnings three out of the last four quarters by an average of 7.27%. The company reports second-quarter earnings on Aug 6. Read the Feb 15 analysis.

Update to Previous Value Zacks Rank Buy Stocks

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