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Schnitzer Steel (SCHN) Soars to 52-Week High, Time to Cash Out?
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Shares of Schnitzer Steel Industries have been strong performers lately, with the stock up 25.5% over the past month. The stock hit a new 52-week high of $43.5 in the previous session. Schnitzer Steel Industries has gained 34.9% since the start of the year compared to the 9.1% move for the Zacks Basic Materials sector and the 13.9% return for the Zacks Steel - Producers industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on January 7, 2021, Schnitzer Steel reported EPS of $0.57 versus consensus estimate of $0.39.
For the current fiscal year, Schnitzer Steel is expected to post earnings of $3.4 per share on $2.45 billion in revenues. This represents a 690.7% change in EPS on a 42.87% change in revenues. For the next fiscal year, the company is expected to earn $3.1 per share on $2.55 billion in revenues. This represents a year-over-year change of -8.82% and 4.4%, respectively.
Valuation Metrics
Schnitzer Steel may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Schnitzer Steel has a Value Score of C. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 12.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 16.6X versus its peer group's average of 9.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Schnitzer Steel currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Schnitzer Steel meets the list of requirements. Thus, it seems as though Schnitzer Steel shares could have potential in the weeks and months to come.
How Does Schnitzer Steel Stack Up to the Competition?
Shares of Schnitzer Steel have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including Aperam (APEMY - Free Report) , Nucor (NUE - Free Report) , and POSCO (PKX - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 8% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Schnitzer Steel, even beyond its own solid fundamental situation.
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Schnitzer Steel (SCHN) Soars to 52-Week High, Time to Cash Out?
Shares of Schnitzer Steel Industries have been strong performers lately, with the stock up 25.5% over the past month. The stock hit a new 52-week high of $43.5 in the previous session. Schnitzer Steel Industries has gained 34.9% since the start of the year compared to the 9.1% move for the Zacks Basic Materials sector and the 13.9% return for the Zacks Steel - Producers industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on January 7, 2021, Schnitzer Steel reported EPS of $0.57 versus consensus estimate of $0.39.
For the current fiscal year, Schnitzer Steel is expected to post earnings of $3.4 per share on $2.45 billion in revenues. This represents a 690.7% change in EPS on a 42.87% change in revenues. For the next fiscal year, the company is expected to earn $3.1 per share on $2.55 billion in revenues. This represents a year-over-year change of -8.82% and 4.4%, respectively.
Valuation Metrics
Schnitzer Steel may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Schnitzer Steel has a Value Score of C. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 12.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 16.6X versus its peer group's average of 9.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Schnitzer Steel currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Schnitzer Steel meets the list of requirements. Thus, it seems as though Schnitzer Steel shares could have potential in the weeks and months to come.
How Does Schnitzer Steel Stack Up to the Competition?
Shares of Schnitzer Steel have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including Aperam (APEMY - Free Report) , Nucor (NUE - Free Report) , and POSCO (PKX - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 8% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Schnitzer Steel, even beyond its own solid fundamental situation.