Encompass Capital Advisors LLC Takes $18.01 Million Position in Steel Dynamics, Inc. $STLD

Key Points

• Encompass Capital Advisors acquired 100,043 Steel Dynamics shares worth approximately $18.01 million, joining other institutional investors that collectively own 82.41% of the company.
• Steel Dynamics exceeded quarterly expectations, reporting $3.69 in earnings per share versus the $3.63 consensus and $6.09 billion in revenue, up 33.4% year over year.
• Analysts maintain a generally positive outlook, with seven Buy and five Hold ratings; the average rating is “Moderate Buy,” although the average price target of $237.36 is below the reported share price of $250.27.

Encompass Capital Advisors LLC bought a new stake in Steel Dynamics, Inc. (NASDAQ:STLD - Free Report) in the first quarter, according to its most recent Form 13F filing with the SEC. The institutional investor bought 100,043 shares of the basic materials company's stock, valued at approximately $18,008,000. Encompass Capital Advisors LLC owned 0.07% of Steel Dynamics as of its most recent SEC filing.

A number of other hedge funds have also recently added to or reduced their stakes in STLD. Prosperity Bancshares Inc acquired a new position in shares of Steel Dynamics in the 4th quarter valued at $25,000. MV Capital Management Inc. acquired a new stake in Steel Dynamics during the 4th quarter worth $27,000. Sound Income Strategies LLC boosted its stake in Steel Dynamics by 1,500.0% during the 4th quarter. Sound Income Strategies LLC now owns 160 shares of the basic materials company's stock worth $28,000 after purchasing an additional 150 shares during the period. Cedar Mountain Advisors LLC purchased a new position in Steel Dynamics during the 1st quarter worth $31,000. Finally, DV Equities LLC purchased a new position in Steel Dynamics during the 4th quarter worth $33,000. Hedge funds and other institutional investors own 82.41% of the company's stock.

Steel Dynamics Stock Up 1.3%

Shares of NASDAQ:STLD opened at $250.27 on Tuesday. The company has a market cap of $36.22 billion, a price-to-earnings ratio of 22.69, a PEG ratio of 0.47 and a beta of 1.53. The firm's 50-day simple moving average is $246.79 and its 200-day simple moving average is $211.94. The company has a quick ratio of 1.45, a current ratio of 3.18 and a debt-to-equity ratio of 0.45. Steel Dynamics, Inc. has a fifty-two week low of $119.89 and a fifty-two week high of $288.74.

Steel Dynamics (NASDAQ:STLD - Get Free Report) last issued its quarterly earnings results on Monday, July 20th. The basic materials company reported $3.69 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $3.63 by $0.06. The business had revenue of $6.09 billion for the quarter, compared to analyst estimates of $5.56 billion. Steel Dynamics had a net margin of 7.83% and a return on equity of 18.12%. The business's revenue was up 33.4% compared to the same quarter last year. During the same period in the previous year, the business posted $2.01 earnings per share. As a group, equities research analysts predict that Steel Dynamics, Inc. will post 17.17 earnings per share for the current year.

Steel Dynamics Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Friday, July 10th. Stockholders of record on Tuesday, June 30th were paid a dividend of $0.53 per share. This represents a $2.12 dividend on an annualized basis and a dividend yield of 0.8%. The ex-dividend date of this dividend was Tuesday, June 30th. Steel Dynamics's dividend payout ratio is 19.22%.

Insider Activity at Steel Dynamics

In other news, SVP Richard A. Poinsatte sold 2,300 shares of the firm's stock in a transaction that occurred on Tuesday, May 12th. The stock was sold at an average price of $234.11, for a total value of $538,453.00. Following the completion of the sale, the senior vice president directly owned 28,618 shares of the company's stock, valued at $6,699,759.98. This trade represents a 7.44% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, SVP James Stanley Anderson sold 10,000 shares of the company's stock in a transaction on Friday, June 5th. The stock was sold at an average price of $268.70, for a total value of $2,687,000.00. Following the transaction, the senior vice president directly owned 102,837 shares in the company, valued at $27,632,301.90. This represents a 8.86% decrease in their position. The disclosure for this sale is available in the SEC filing. 6.60% of the stock is owned by company insiders.

Analysts Set New Price Targets

A number of brokerages have recently commented on STLD. Wells Fargo & Company reduced their target price on shares of Steel Dynamics from $291.00 to $275.00 and set an "overweight" rating for the company in a report on Wednesday, July 22nd. Wall Street Zen raised Steel Dynamics from a "hold" rating to a "buy" rating in a report on Saturday, April 18th. Barclays boosted their price target on Steel Dynamics from $270.00 to $272.00 and gave the company an "overweight" rating in a research report on Wednesday, July 22nd. Weiss Ratings raised Steel Dynamics from a "buy (b-)" rating to a "buy (b)" rating in a research note on Thursday, June 18th. Finally, KeyCorp reaffirmed an "overweight" rating on shares of Steel Dynamics in a research report on Wednesday, July 22nd. Seven investment analysts have rated the stock with a Buy rating and five have given a Hold rating to the company's stock. According to MarketBeat, the stock has an average rating of "Moderate Buy" and an average price target of $237.36.

Steel Dynamics Company Profile

Steel Dynamics, Inc is a U.S.-based, diversified steel producer and metals recycler that operates an integrated network of mini-mills, finishing lines and fabrication facilities. Founded in 1993 and headquartered in Fort Wayne, Indiana, the company manufactures a broad range of steel products and provides downstream processing, coating and fabrication services to industrial customers. Its operations combine steelmaking using electric-arc furnaces with extensive metals recycling capabilities, allowing Steel Dynamics to convert scrap ferrous and nonferrous materials into finished steel products.

The company's product portfolio includes flat-rolled steel (coiled and sheet products), structural steel and fabricated components, along with coated and painted steel used in consumer, industrial and construction applications.

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