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What Makes Gerdau (GGB) an Attractive Pick for Long Term?
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We issued an updated research report on Gerdau S.A. (GGB - Free Report) on Dec 20, 2016. The company is a leading steel producer in Brazil with operations spanning across South America, North America, Europe and Asia. The company is the second-largest long steel producer in the world and the largest in the Americas.
Year to date, Gerdau’s American Depository Receipts yielded return of 158.3%, significantly outperforming the return of 76% recorded by the Zacks categorized Steel Producers industry.
We believe Gerdau’s product portfolio and manufacturing techniques will help it grow over the long term. The company produces crude steel, including slabs, blooms, billets, and flat steel as well as engages in iron ore mining activities. Also, its international diversity provides support to the top line. In third-quarter 2016, the company derived nearly 32.2% of net revenue from its Brazilian operations, 32.5% from the North American business and 16.6% from South America.
In addition, Gerdau’s strategy of disposing loss-making assets/businesses will enable it to focus on the profitable ones. For instance, the company completed the disposition of Spain-based special steel producer to Clerbil SL in first-half 2016.
Going forward, any investment by the government in infrastructure improvements will boost steel demand in Brazil, thereby creating lucrative market conditions for steel producers like Gerdau. For 2016, the company intends to spend approximately R$1.5 billion on capital investments. Also, it is committed toward rewarding its shareholders through dividends and interest on capital payments. In first nine months of 2016, the company paid dividends and interest on capital of R$51.7 million.
With a market capitalization of $5.2 billion Gerdau currently carries a Zacks Rank #2 (Buy). Other stocks worth mentioning in the industry include POSCO (PKX - Free Report) , AK Steel Holding Corporation and Companhia Siderúrgica Nacional (SID - Free Report) . While POSCO sports a Zacks Rank #1 (Strong Buy), AK Steel Holding and Companhia Siderúrgica Nacional carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
POSCO’s earnings estimates for 2016 and 2017 have been revised upward over the last 60 days.
AK Steel Holding Corporation has a positive average earnings surprise of 170.80% for the last four quarters, while its earnings estimates for 2016 and 2017 have improved over the last 60 days.
Companhia Siderúrgica Nacional’s bottom-line estimates for 2016 and 2017 have improved over the past 60 days.
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What Makes Gerdau (GGB) an Attractive Pick for Long Term?
We issued an updated research report on Gerdau S.A. (GGB - Free Report) on Dec 20, 2016. The company is a leading steel producer in Brazil with operations spanning across South America, North America, Europe and Asia. The company is the second-largest long steel producer in the world and the largest in the Americas.
Year to date, Gerdau’s American Depository Receipts yielded return of 158.3%, significantly outperforming the return of 76% recorded by the Zacks categorized Steel Producers industry.
We believe Gerdau’s product portfolio and manufacturing techniques will help it grow over the long term. The company produces crude steel, including slabs, blooms, billets, and flat steel as well as engages in iron ore mining activities. Also, its international diversity provides support to the top line. In third-quarter 2016, the company derived nearly 32.2% of net revenue from its Brazilian operations, 32.5% from the North American business and 16.6% from South America.
In addition, Gerdau’s strategy of disposing loss-making assets/businesses will enable it to focus on the profitable ones. For instance, the company completed the disposition of Spain-based special steel producer to Clerbil SL in first-half 2016.
Going forward, any investment by the government in infrastructure improvements will boost steel demand in Brazil, thereby creating lucrative market conditions for steel producers like Gerdau. For 2016, the company intends to spend approximately R$1.5 billion on capital investments. Also, it is committed toward rewarding its shareholders through dividends and interest on capital payments. In first nine months of 2016, the company paid dividends and interest on capital of R$51.7 million.
With a market capitalization of $5.2 billion Gerdau currently carries a Zacks Rank #2 (Buy). Other stocks worth mentioning in the industry include POSCO (PKX - Free Report) , AK Steel Holding Corporation and Companhia Siderúrgica Nacional (SID - Free Report) . While POSCO sports a Zacks Rank #1 (Strong Buy), AK Steel Holding and Companhia Siderúrgica Nacional carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
POSCO’s earnings estimates for 2016 and 2017 have been revised upward over the last 60 days.
AK Steel Holding Corporation has a positive average earnings surprise of 170.80% for the last four quarters, while its earnings estimates for 2016 and 2017 have improved over the last 60 days.
Companhia Siderúrgica Nacional’s bottom-line estimates for 2016 and 2017 have improved over the past 60 days.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>