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If You Invested $1000 in Reliance Steel 10 Years Ago, This Is How Much You'd Have Now
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How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Reliance Steel (RS - Free Report) ten years ago? It may not have been easy to hold on to RS for all that time, but if you did, how much would your investment be worth today?
Reliance Steel's Business In-Depth
With that in mind, let's take a look at Reliance Steel's main business drivers.
Los Angeles, CA-based Reliance Steel & Aluminum Co. is a leading metals service center company engaged in value-added materials management and metals processing services. It also distributes over 100,000 metal products to more than 125,000 customers across a vast spectrum of industries. Reliance Steel is the biggest North American metals service center company based on revenues with more than 300 locations.
Reliance Steel recorded net sales of $8,811.9 million in 2020. Its major products are carbon steel (53% of 2020 sales), aluminum (19%), stainless steel (16%) and alloy (5%).
Reliance has 200 processing and distribution centers spread across 39 states in the United States and in foreign countries such as Belgium, Canada, China, Malaysia, Mexico, Singapore, South Korea and the United Kingdom. Although the company has a diverse geographic presence, the southeastern region of the United States generates majority of its sales.
Reliance Steel provides metals processing services such as cutting-to-length, blanking, slitting, burning, plasma burning, and precision plate sawing, sawing, and shearing, among others, all to customer specifications. These services save time and labor and reduce overall manufacturing costs for the customer.
The company improves its operating results through strategic acquisitions and the expansion of its existing operations. It has made 59 acquisitions since its 1994 Initial public offering (IPO).
The company, in March 2018, completed its purchase of all of the issued and outstanding capital stock of DuBose National Energy Services, Inc. (DuBose Energy) and its affiliate, DuBose National Energy Fasteners & Machined Parts, Inc. (DuBose Fasteners) for an undisclosed price. DuBose Energy and DuBose Fasteners specialize in fabrication, supply and distribution of metal and metal products to the nuclear industry including utilities, component manufacturers and contractors.
Moreover, Reliance Steel, in November 2018, completed the purchase of all of the membership interests of All Metals Holding, LLC, including its operating subsidiaries, All Metals Processing & Logistics, Inc. (“AMPL”) and All Metals Transportation and Logistics, Inc. (“AMTL”). AMPL specializes in toll processing for automotive, construction, appliance and other diverse-end markets.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Reliance Steel ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in October 2011 would be worth $3,756.51, or a gain of 275.65%, as of October 19, 2021, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 266.13% and gold's return of 3.16% over the same time frame.
Going forward, analysts are expecting more upside for RS.
Earnings estimates for Reliance Steel for the third quarter have been going up over the past month. It should benefit from higher prices, broad and diversified product base and wide geographic footprint. The company’s core business strategy is to enhance operating results by strategic acquisitions. Reliance Steel is also seeing a strong rebound in non-residential construction, its largest market. Reliance Steel’s investments in new processing capabilities will also improve the service offerings to its customers. The company also remains committed to offer incremental returns to its shareholders leveraging strong cash flows. However, Reliance Steel is witnessing weakness across automotive and commercial aerospace markets. Supply chain disruptions are also impacting its shipments. High debt level is another concern.
The stock has jumped 5.32% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 2 higher, for fiscal 2021; the consensus estimate has moved up as well.
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If You Invested $1000 in Reliance Steel 10 Years Ago, This Is How Much You'd Have Now
How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Reliance Steel (RS - Free Report) ten years ago? It may not have been easy to hold on to RS for all that time, but if you did, how much would your investment be worth today?
Reliance Steel's Business In-Depth
With that in mind, let's take a look at Reliance Steel's main business drivers.
Los Angeles, CA-based Reliance Steel & Aluminum Co. is a leading metals service center company engaged in value-added materials management and metals processing services. It also distributes over 100,000 metal products to more than 125,000 customers across a vast spectrum of industries. Reliance Steel is the biggest North American metals service center company based on revenues with more than 300 locations.
Reliance Steel recorded net sales of $8,811.9 million in 2020. Its major products are carbon steel (53% of 2020 sales), aluminum (19%), stainless steel (16%) and alloy (5%).
Reliance has 200 processing and distribution centers spread across 39 states in the United States and in foreign countries such as Belgium, Canada, China, Malaysia, Mexico, Singapore, South Korea and the United Kingdom. Although the company has a diverse geographic presence, the southeastern region of the United States generates majority of its sales.
Reliance Steel provides metals processing services such as cutting-to-length, blanking, slitting, burning, plasma burning, and precision plate sawing, sawing, and shearing, among others, all to customer specifications. These services save time and labor and reduce overall manufacturing costs for the customer.
The company improves its operating results through strategic acquisitions and the expansion of its existing operations. It has made 59 acquisitions since its 1994 Initial public offering (IPO).
The company, in March 2018, completed its purchase of all of the issued and outstanding capital stock of DuBose National Energy Services, Inc. (DuBose Energy) and its affiliate, DuBose National Energy Fasteners & Machined Parts, Inc. (DuBose Fasteners) for an undisclosed price. DuBose Energy and DuBose Fasteners specialize in fabrication, supply and distribution of metal and metal products to the nuclear industry including utilities, component manufacturers and contractors.
Moreover, Reliance Steel, in November 2018, completed the purchase of all of the membership interests of All Metals Holding, LLC, including its operating subsidiaries, All Metals Processing & Logistics, Inc. (“AMPL”) and All Metals Transportation and Logistics, Inc. (“AMTL”). AMPL specializes in toll processing for automotive, construction, appliance and other diverse-end markets.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Reliance Steel ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in October 2011 would be worth $3,756.51, or a gain of 275.65%, as of October 19, 2021, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 266.13% and gold's return of 3.16% over the same time frame.
Going forward, analysts are expecting more upside for RS.
Earnings estimates for Reliance Steel for the third quarter have been going up over the past month. It should benefit from higher prices, broad and diversified product base and wide geographic footprint. The company’s core business strategy is to enhance operating results by strategic acquisitions. Reliance Steel is also seeing a strong rebound in non-residential construction, its largest market. Reliance Steel’s investments in new processing capabilities will also improve the service offerings to its customers. The company also remains committed to offer incremental returns to its shareholders leveraging strong cash flows. However, Reliance Steel is witnessing weakness across automotive and commercial aerospace markets. Supply chain disruptions are also impacting its shipments. High debt level is another concern.
The stock has jumped 5.32% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 2 higher, for fiscal 2021; the consensus estimate has moved up as well.