Reliance Steel & Aluminum Co.NYSE
Half Way Review Of My 2016 Top Pick: Reliance Steel Thesis Has Played Out, And Then Some
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Non-Correlating Stock Ideas
Tue, Nov. 29, 12:41 PM
- Steel stocks (SLX -2.4%) look expensive following their post-election rally, but the strong U.S. dollar could keep a lid on prices while slowing growth in China could derail the steel price rally, Macquarie analysts say as they downgrade several names in the sector.
- U.S. steel prices have risen to $550-$560/ton, driven partly by tight domestic supply and a lack of imports, but at current levels steel stocks reflect steel prices of more than $600/ton, increasing the risk posed by the shares, the firm says.
- Macquarie downgrades Nucor (NUE -0.5%), TimkenSteel (TMST -1.9%) and Worthington (WOR -3.5%) to Underperform from Neutral, and cuts Steel Dynamics (STLD -0.3%), AK Steel (AKS +0.1%) and Reliance Steel (RS -0.1%) to Neutral from Outperform; U.S. Steel (X -2%) is maintained at Underperform, while Argus analysts downgraded X, saying the shares are overbought.
Tue, Nov. 22, 3:45 PM
- U.S. Steel (X +11.4%), AK Steel (AKS +10.7%), Steel Dynamics (STLD +4.1%), Nucor (NUE +4.4%) and Commercial Metals (CMC +4.7%) all surge to 52-week highs, extending their Trump-fueled rally as trade protectionist talk suggests that higher than usual premiums can be achieved for steel mills.
- BofA Merrill Lynch raises its 2017 average price estimate for U.S. hot-rolled coil to $650/short ton vs. its prior view of $535, as rising global prices and more protectionism should fuel strong steel prices into 2017 (SLX +5.8%).
- Bloomberg reports BofA boosted its stock price targets for Buy-rated AKS to $12 from $7, STLD to $37 from $30, CMC to $24 from $20, NUE to $65 from $57, and Allegheny Tech (ATI +7.5%) to $20 from $19; the firm remains Neutral on X and Reliant Steel (RS +6.1%).
- Also sharply higher today: MT +8.3%, CLF +13.8%, WOR +5.3%, RIO +4.1%, BHP +5.2%, VALE +7.8%.
Wed, Nov. 16, 8:40 AM
Wed, Nov. 9, 11:19 AM
- Copper surges to a 15-month high, now +2.9% at $2.45/lb. after rising as much as 3.4% to its highest since July 2015, also boosting other metals as some investors speculate that a Trump presidency could launch significant fiscal stimulus and boost demand for metals.
- In his victory speech last night, Trump said he would prioritize the rebuilding of American infrastructure with hopes of doubling U.S. economic growth.
- Among related tickers: FCX +7.7%, RIO +5.9%, BHP +3.4%, VALE +4.2%, MT +10.6%, X +17.1%, STLD +8.2%, AKS +11%, NUE +11.6%, CLF +12%, RS +8.5%, WOR +3.8%.
- ETFs: JJC, CPER, CUPM
Tue, Oct. 25, 1:14 PM
- U.S. steelmakers are higher after AK Steel (AKS +6.2%) and Schnitzer Steel (SCHN +2.3%) both reported stronger quarterly earnings, as the companies benefited from cost-cutting measures.
- AKS reported better than expected Q3 earnings as total operating expenses fell 19% Y/Y; revenues fell 15% Y/Y to $1.45B as shipments fell 24%, partly related to a decision to focus less on less profitable commoditized products, but the selling price per ton rose 11% to $1,016, due to a better product mix and a more favorable selling environment.
- SCHN posted above consensus FQ4 earnings and revenues as overhead costs declined 20% Y/Y; ferrous sales volumes of 914K tons and nonferrous sales volumes of 153M lbs. were 2% and 13% lower Y/Y, respectively.
- Also: X +2%, STLD +0.8%, WOR -0.1%, RS -0.6%, NUE -0.7%.
Thu, Oct. 20, 12:36 PM
- Three steel companies - Steel Dynamics , Reliance Steel and Nucor - have reported earnings since yesterday’s close, with three sharply different results.
- Steel Dynamics (STLD +2.7%) is higher after reporting Q3 earnings that more than doubled as revenues rose 7.7% Y/Y to $2.1B, and gross profit margin improved to 19.4% from 11.7% a year ago, driven by a market rebound and a drop in Chinese imports.
- Reliance Steel (RS -6%) is sinking after Q3 results missed analyst estimates and guided Q4 EPS below consensus, now seeing EPS of $0.65-$0.75 vs. $0.99 analyst consensus estimate, and expecting Q4 tons sold to fall 5%-7% Q/Q and average selling prices to drop by 1%-3% Q/Q.
- Nucor (NUE +0.2%) has recovered from earlier losses to edge into the green after Q3 results missed expectations and warning that Q4 earnings likely will decrease "notably" from Q3 because of lower margins in the steel mills segment, partly due to typical Q4 seasonality.
- U.S. Steel (X +4.9%), which reports earnings on Nov. 2, and AK Steel (AKS +4.3%), which reports on Oct. 25, are higher.
Thu, Oct. 20, 6:51 AM
Wed, Oct. 19, 5:30 PM
Thu, Oct. 13, 2:33 PM
- Even without the latest gloomy export data from China, shares of U.S. Steel (X -5.5%) might have dropped because of falling steel prices.
- Axiom Capital’s Gordon Johnson says U.S. hot rolled coil steel prices have dropped to $496/ton, below “the psychologically [important] $500 threshold... this is not good for U.S. steel mills.”
- Also: SLX -2.9%, MT -2.3%, AKS -4.2%, STLD -1.9%, RS -1.7%, ATI -3%, WOR -1.6%.
Thu, Sep. 15, 6:53 PM
- Steel prices (NYSEARCA:SLX) likely will continue to move lower through year-end, Jefferies analysts say, citing "incremental weakness in raw material input costs as well as supply-side pressures from ramping capacity" at projects such as ArcelorMittal’s BF restart and Big River.
- Still, while Jefferies lowers price targets on all the stocks in its coverage except three, it awards Buy ratings to Steel Dynamics (NASDAQ:STLD) and Nucor (NYSE:NUE); the firm sees STLD as its the top pick in the sector and NUE as the most defensive, saying the companies boast relatively lower cost operating structures and less levered balance sheets.
- Meanwhile, Hold-rated U.S. Steel (NYSE:X) and AK Steel (NYSE:AKS) are highly sensitive to absolute steel prices and face margin risk from surging coking coal prices, so the shares likely will face the brunt of the downside pressure, Jefferies says.
- Also rated Hold: CMC, ZEUS, RS, RYI, TMST, WOR.
Thu, Sep. 15, 3:32 PM
Tue, Jul. 26, 6:54 PM
- U.S. Steel (NYSE:X) +4.1% AH after reporting a narrower than expected Q2 loss and saying it expects FY 2016 EPS of ~$0.34.
- The company expects ~$850M in adjusted EBITDA for the full year, compared with its April outlook of nearly $400M, saying "the significant improvements we have made to our earnings power through our Carnegie Way transformation will become more apparent as market prices recover from the very low levels at the end of 2015."
- U.S. Steel says pricing increases contributed to a strong Q2, and expects more price improvement in H2 of the year; its European segment posted its best results in nearly eight years, its flat-rolled segment returned to profitability, and an improving cost structure helped margins.
- Steel names AK Steel (NYSE:AKS), Nucor (NYSE:NUE), Steel Dynamics (NASDAQ:STLD) and Reliant Steel (NYSE:RS) have reported better than consensus earnings this quarter on the heels of surging steel prices.
Thu, Jul. 21, 2:03 PM
Thu, Jul. 21, 8:32 AM
- Net income of $100.9M, or $1.38 per share vs. $90.2M, or $1.20 per share, in the same quarter a year ago.
- Tons sold were up 0.7% from the second quarter of 2015, with the average selling price per ton sold down 10.1%.
- During the three months ended June 30, the company did not repurchase any shares of its common stock.
- Outlook for Q3: Earnings per diluted share of $1.25-$1.35.
- Q2 results
Thu, Jul. 21, 6:54 AM
Wed, Jul. 20, 5:30 PM| Wed, Jul. 20, 5:30 PM | 13 Comments