Encompass Capital Advisors LLC Buys New Position in Gerdau S.A. $GGB

Key Points

• Encompass Capital Advisors LLC has acquired a significant stake in Gerdau S.A., purchasing 10,610,617 shares valued at approximately $30.1 million, representing 0.51% of the company's stock.
• Gerdau recently increased its quarterly dividend to $0.0216 per share, reflecting an annualized payout of $0.09 and a yield of 2.8%.
• UBS Group upgraded Gerdau from a "neutral" rating to a "buy" rating, raising the target price from $2.90 to $3.80, with a current consensus rating of "Moderate Buy."

Encompass Capital Advisors LLC bought a new position in shares of Gerdau S.A. (NYSE:GGB - Free Report) in the 1st quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The firm bought 10,610,617 shares of the basic materials company's stock, valued at approximately $30,134,000. Encompass Capital Advisors LLC owned 0.51% of Gerdau at the end of the most recent reporting period.

A number of other hedge funds have also recently added to or reduced their stakes in the company. Wolverine Trading LLC purchased a new stake in Gerdau in the 4th quarter valued at $37,000. Xponance Inc. bought a new stake in shares of Gerdau during the 1st quarter valued at $40,000. Sigma Planning Corp purchased a new position in Gerdau during the first quarter worth about $46,000. Raymond James Financial Inc. purchased a new position in Gerdau during the fourth quarter worth about $65,000. Finally, R Squared Ltd lifted its holdings in shares of Gerdau by 84.0% during the 1st quarter. R Squared Ltd now owns 22,930 shares of the basic materials company's stock worth $65,000 after acquiring an additional 10,470 shares during the last quarter. Institutional investors and hedge funds own 1.49% of the company's stock.

Gerdau Stock Down 0.8%

Shares of GGB stock traded down $0.03 during mid-day trading on Tuesday, hitting $3.14. The company's stock had a trading volume of 6,190,559 shares, compared to its average volume of 11,458,274. The stock has a market cap of $6.26 billion, a price-to-earnings ratio of 10.81, a PEG ratio of 0.77 and a beta of 1.38. The business has a 50-day moving average price of $3.00 and a 200 day moving average price of $2.86. Gerdau S.A. has a 52-week low of $2.27 and a 52-week high of $3.62. The company has a debt-to-equity ratio of 0.30, a quick ratio of 1.50 and a current ratio of 2.89.

Gerdau (NYSE:GGB - Get Free Report) last posted its quarterly earnings data on Thursday, July 31st. The basic materials company reported $0.08 EPS for the quarter, missing analysts' consensus estimates of $0.09 by ($0.01). Gerdau had a net margin of 4.81% and a return on equity of 6.51%. The firm had revenue of $3.13 billion for the quarter, compared to analysts' expectations of $3.22 billion. Research analysts predict that Gerdau S.A. will post 0.46 EPS for the current fiscal year.

Gerdau Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Monday, August 25th. Investors of record on Wednesday, August 13th were paid a dividend of $0.0216 per share. The ex-dividend date of this dividend was Wednesday, August 13th. This represents a $0.09 dividend on an annualized basis and a dividend yield of 2.8%. This is an increase from Gerdau's previous quarterly dividend of $0.02. Gerdau's dividend payout ratio is 27.59%.

Wall Street Analysts Forecast Growth

Separately, UBS Group upgraded Gerdau from a "neutral" rating to a "buy" rating and increased their target price for the company from $2.90 to $3.80 in a report on Monday, June 9th. One research analyst has rated the stock with a Buy rating and one has given a Hold rating to the stock. According to data from MarketBeat.com, Gerdau currently has an average rating of "Moderate Buy" and a consensus price target of $3.80.

About Gerdau

Gerdau SA, together with its subsidiaries, operates as a steel producer company. The company operates through Brazil Business, North America Business, South America Business, and Special Steel Business segments. It also provides semi-finished products, including billets, blooms, and slabs; common long rolled products, such as rebars, wire rods, merchant bars, light shapes, and profiles to the construction and manufacturing industries; drawn products comprising barbed and barbless fence wires, galvanized wires, fences, concrete reinforcing wire mesh, nails, and clamps for manufacturing, construction, and agricultural industries; and special steel products used in auto parts, light and heavy vehicles, and agricultural machinery, as well as in the oil and gas, wind energy, machinery and equipment, mining and rail, and other markets.