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Companhia Siderurgica's Prospects Strong: Should You Buy?
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We issued an updated research report on Companhia Siderurgica Nacional (SID - Free Report) or CSN on Dec 7, 2016. The company produces hot and cold-rolled flat steel, galvanized sheets and tin plates for the packaging, automotive and construction industries. It currently has a market capitalization of approximately $4.8 billion.
After the release of third-quarter 2016 results on Nov 14, shares of Companhia Siderurgica Nacional yielded a return of 9.6%, outperforming the return of 8.9% by the Zacks categorized Steel Producers industry.
We believe that Companhia Siderurgica Nacional’s diversified business structure, with exposure in steel, iron ore mining, logistics, cement and energy industries will prove beneficial over the long run. In the third quarter, roughly 40.1% of the company’s total revenue was sourced from non-steel businesses. As projected by the World Steel Association (Nov 2016), improvements of 0.2% in 2016 and 0.5% in 2017 in world steel demand will favor steel producers like CSN. Also, demand for steel in Brazil will likely improve with the increase in infrastructural investments.
In addition, Companhia Siderurgica Nacional consistently strives to improve its production capabilities and services. For 2014−2019, the company has planned investments totaling R$21.3 billion, including R$12 billion for the mining business, R$0.4 billion for steel, R$1.4 billion for cement and R$7.5 billion for miscellaneous purposes.
In the third quarter, Companhia Siderurgica Nacional’s net loss contracted 80% year over year, while loss per American Depository Receipt came in at 2 cents. Net revenue grew 13.6% on the back of higher sales volume in the mining segment. Cost of sales, as a percentage of revenue, decreased, while gross margin improved 500 basis points.
Companhia Siderurgica Nacional currently holds a Zacks Rank #2 (Buy). Other stocks worth considering in the steel industry include POSCO (PKX - Free Report) , Ternium S.A. (TX - Free Report) and Gerdau S.A. (GGB - Free Report) . While both POSCO and Ternium sport a Zacks Rank #1 (Strong Buy), Gerdau carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
POSCO and Gerdau’s earnings estimates for 2016 and 2017 have been revised upward over the last 60 days.
Ternium S.A. has a positive average earnings surprise of 11.38% for the last four quarters. Also, earnings estimates for 2016 have been revised upward over the last 60 days.
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Companhia Siderurgica's Prospects Strong: Should You Buy?
We issued an updated research report on Companhia Siderurgica Nacional (SID - Free Report) or CSN on Dec 7, 2016. The company produces hot and cold-rolled flat steel, galvanized sheets and tin plates for the packaging, automotive and construction industries. It currently has a market capitalization of approximately $4.8 billion.
After the release of third-quarter 2016 results on Nov 14, shares of Companhia Siderurgica Nacional yielded a return of 9.6%, outperforming the return of 8.9% by the Zacks categorized Steel Producers industry.
We believe that Companhia Siderurgica Nacional’s diversified business structure, with exposure in steel, iron ore mining, logistics, cement and energy industries will prove beneficial over the long run. In the third quarter, roughly 40.1% of the company’s total revenue was sourced from non-steel businesses. As projected by the World Steel Association (Nov 2016), improvements of 0.2% in 2016 and 0.5% in 2017 in world steel demand will favor steel producers like CSN. Also, demand for steel in Brazil will likely improve with the increase in infrastructural investments.
In addition, Companhia Siderurgica Nacional consistently strives to improve its production capabilities and services. For 2014−2019, the company has planned investments totaling R$21.3 billion, including R$12 billion for the mining business, R$0.4 billion for steel, R$1.4 billion for cement and R$7.5 billion for miscellaneous purposes.
In the third quarter, Companhia Siderurgica Nacional’s net loss contracted 80% year over year, while loss per American Depository Receipt came in at 2 cents. Net revenue grew 13.6% on the back of higher sales volume in the mining segment. Cost of sales, as a percentage of revenue, decreased, while gross margin improved 500 basis points.
Companhia Siderurgica Nacional currently holds a Zacks Rank #2 (Buy). Other stocks worth considering in the steel industry include POSCO (PKX - Free Report) , Ternium S.A. (TX - Free Report) and Gerdau S.A. (GGB - Free Report) . While both POSCO and Ternium sport a Zacks Rank #1 (Strong Buy), Gerdau carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
POSCO and Gerdau’s earnings estimates for 2016 and 2017 have been revised upward over the last 60 days.
Ternium S.A. has a positive average earnings surprise of 11.38% for the last four quarters. Also, earnings estimates for 2016 have been revised upward over the last 60 days.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>