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Steel Dynamics (STLD) Wraps Up Mexican Recycling Company Buyout
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Steel Dynamics, Inc. (STLD - Free Report) has completed the acquisition of Roca Acero S.A. de C.V. The acquisition is part of its North American raw material procurement strategy. The deal was fully financed with available cash.
Headquartered in Monterrey, Mexico, Roca operates a ferrous and nonferrous scrap metals recycling business. Its operations consist of five scrap processing facilities, strategically placed near high-volume industrial scrap sources throughout Central and Northern Mexico. The entity presently ships roughly 575,000 gross tons of scrap per year and has an estimated annual processing capability of around 850,000 gross tons.
Combined with Steel Dynamics’ existing North American metals recycling facilities in Mexico, the addition of Roca bolsters its ferrous and nonferrous raw material procurement strategy in the region.
Steel Dynamics expects its Mexican metals recycling facilities to provide a significant advantage to its electric-arc-furnace steel operations and planned aluminum flat rolled products operations. The addition will also provide a high-quality, customer-centered option for its customers in Mexico and the United States, the company noted.
Shares of Steel Dynamics have gained 30.9% in the past year against 15% decline of the industry.
Image Source: Zacks Investment Research
Steel Dynamics, last month, announced earnings guidance for third-quarter 2022 in the band of $4.93-$4.97 per share. Its guidance for adjusted earnings is pegged in the range of $5.33-$5.37 per share, barring the impact from costs related to the startup of its Sinton Texas Flat Roll Steel Mill growth investment of roughly $104 million or 40 cents per share.
The company expects third-quarter profitability from its steel operations to be historically strong but considerably lower than second-quarter 2022 levels. The downside will likely be caused by lower earnings from the company's flat roll steel operations, as reduced average flat roll pricing is expected to more than offset projected higher shipments and lower raw material costs.
Earnings from the company’s metals recycling operations are projected to be lower than sequential second-quarter results, due to lower realized pricing and volume. Earnings from the steel fabrication operations are projected to be significantly higher than record second-quarter results on strong volume and expanding margins, aided by improved realized pricing and lower average steel input costs. The company is seeing continued strength in the non-residential construction sector as customer order activity is supporting a continuing historically strong order backlog.
Steel Dynamics currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Brigham Minerals, Inc. and Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) .
Albemarle, sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 426.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 22.1% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 25% in a year.
Brigham Minerals, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 150.9% for the current year. The consensus estimate for MNRL's earnings for the current year has been revised 7.8% upward in the past 60 days.
Brigham Minerals’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 13.9%. MNRL has gained around 38% over a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 18.8% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 80% in a year. The company carries a Zacks Rank #2 (Buy).
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Steel Dynamics (STLD) Wraps Up Mexican Recycling Company Buyout
Steel Dynamics, Inc. (STLD - Free Report) has completed the acquisition of Roca Acero S.A. de C.V. The acquisition is part of its North American raw material procurement strategy. The deal was fully financed with available cash.
Headquartered in Monterrey, Mexico, Roca operates a ferrous and nonferrous scrap metals recycling business. Its operations consist of five scrap processing facilities, strategically placed near high-volume industrial scrap sources throughout Central and Northern Mexico. The entity presently ships roughly 575,000 gross tons of scrap per year and has an estimated annual processing capability of around 850,000 gross tons.
Combined with Steel Dynamics’ existing North American metals recycling facilities in Mexico, the addition of Roca bolsters its ferrous and nonferrous raw material procurement strategy in the region.
Steel Dynamics expects its Mexican metals recycling facilities to provide a significant advantage to its electric-arc-furnace steel operations and planned aluminum flat rolled products operations. The addition will also provide a high-quality, customer-centered option for its customers in Mexico and the United States, the company noted.
Shares of Steel Dynamics have gained 30.9% in the past year against 15% decline of the industry.
Image Source: Zacks Investment Research
Steel Dynamics, last month, announced earnings guidance for third-quarter 2022 in the band of $4.93-$4.97 per share. Its guidance for adjusted earnings is pegged in the range of $5.33-$5.37 per share, barring the impact from costs related to the startup of its Sinton Texas Flat Roll Steel Mill growth investment of roughly $104 million or 40 cents per share.
The company expects third-quarter profitability from its steel operations to be historically strong but considerably lower than second-quarter 2022 levels. The downside will likely be caused by lower earnings from the company's flat roll steel operations, as reduced average flat roll pricing is expected to more than offset projected higher shipments and lower raw material costs.
Earnings from the company’s metals recycling operations are projected to be lower than sequential second-quarter results, due to lower realized pricing and volume. Earnings from the steel fabrication operations are projected to be significantly higher than record second-quarter results on strong volume and expanding margins, aided by improved realized pricing and lower average steel input costs. The company is seeing continued strength in the non-residential construction sector as customer order activity is supporting a continuing historically strong order backlog.
Steel Dynamics, Inc. Price and Consensus
Steel Dynamics, Inc. price-consensus-chart | Steel Dynamics, Inc. Quote
Zacks Rank & Stocks to Consider
Steel Dynamics currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Brigham Minerals, Inc. and Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) .
Albemarle, sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 426.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 22.1% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 25% in a year.
Brigham Minerals, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 150.9% for the current year. The consensus estimate for MNRL's earnings for the current year has been revised 7.8% upward in the past 60 days.
Brigham Minerals’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 13.9%. MNRL has gained around 38% over a year.
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 18.8% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 80% in a year. The company carries a Zacks Rank #2 (Buy).