Encompass Capital Advisors LLC Makes New Investment 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 acquired a new stake in shares of Gerdau S.A. (NYSE:GGB - Free Report) during the 1st quarter, according to the company in its most recent 13F filing with the SEC. The firm acquired 10,610,617 shares of the basic materials company's stock, valued at approximately $30,134,000. Encompass Capital Advisors LLC owned approximately 0.51% of Gerdau as of its most recent filing with the SEC.

Several other institutional investors and hedge funds also recently made changes to their positions in the business. Abacus Wealth Partners LLC lifted its holdings in Gerdau by 16.8% in the 1st quarter. Abacus Wealth Partners LLC now owns 26,949 shares of the basic materials company's stock worth $77,000 after buying an additional 3,873 shares during the period. Wells Fargo & Company MN lifted its holdings in Gerdau by 9.5% in the 4th quarter. Wells Fargo & Company MN now owns 53,736 shares of the basic materials company's stock worth $155,000 after buying an additional 4,657 shares during the period. Virtus Family Office LLC lifted its holdings in Gerdau by 2.4% in the 1st quarter. Virtus Family Office LLC now owns 303,899 shares of the basic materials company's stock worth $863,000 after buying an additional 7,247 shares during the period. Invesco Ltd. lifted its holdings in Gerdau by 3.1% in the 1st quarter. Invesco Ltd. now owns 280,886 shares of the basic materials company's stock worth $798,000 after buying an additional 8,574 shares during the period. Finally, R Squared Ltd lifted its holdings in Gerdau by 84.0% in the 1st quarter. R Squared Ltd now owns 22,930 shares of the basic materials company's stock worth $65,000 after buying an additional 10,470 shares during the period. Institutional investors own 1.49% of the company's stock.

Gerdau Stock Down 1.1%

NYSE GGB traded down $0.04 during trading hours on Monday, reaching $3.17. 10,680,600 shares of the company's stock traded hands, compared to its average volume of 11,490,092. Gerdau S.A. has a 52-week low of $2.27 and a 52-week high of $3.62. The firm has a market cap of $6.32 billion, a PE ratio of 10.91, a PEG ratio of 0.77 and a beta of 1.38. The firm has a 50-day simple moving average of $3.00 and a 200 day simple moving average of $2.86. The company has a debt-to-equity ratio of 0.30, a current ratio of 2.89 and a quick ratio of 1.50.

Gerdau (NYSE:GGB - Get Free Report) last issued its quarterly earnings results on Thursday, July 31st. The basic materials company reported $0.08 earnings per share (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 business had revenue of $3.13 billion for the quarter, compared to analysts' expectations of $3.22 billion. Sell-side analysts anticipate that Gerdau S.A. will post 0.46 EPS for the current fiscal year.

Gerdau Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Monday, August 25th. Shareholders of record on Wednesday, August 13th were issued a $0.0216 dividend. This represents a $0.09 annualized dividend and a yield of 2.7%. This is a boost from Gerdau's previous quarterly dividend of $0.02. The ex-dividend date of this dividend was Wednesday, August 13th. Gerdau's dividend payout ratio is presently 24.14%.

Analyst Upgrades and Downgrades

Separately, UBS Group raised shares of Gerdau from a "neutral" rating to a "buy" rating and lifted their target price for the company from $2.90 to $3.80 in a research note on Monday, June 9th. One analyst has rated the stock with a Buy rating and one has assigned a Hold rating to the company's stock. Based on data from MarketBeat.com, Gerdau currently has a consensus rating of "Moderate Buy" and an average price target of $3.80.

Gerdau Company Profile

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.