Kawa Capital Management Inc Acquires New Holdings in Gerdau S.A. $GGB

Key Points

• Kawa Capital Management Inc has invested $6.01 million in Gerdau S.A., acquiring 2,094,404 shares, which now represents 13.4% of their total holdings.
• Gerdau's recent earnings were slightly below expectations, with $0.08 EPS compared to the anticipated $0.09, and revenues of $3.13 billion, missing estimates of $3.22 billion.
• The company has increased its quarterly dividend to $0.0216 per share, reflecting a 2.8% yield, up from the previous dividend of $0.02.

Kawa Capital Management Inc acquired a new stake in Gerdau S.A. (NYSE:GGB - Free Report) in the first quarter, according to the company in its most recent Form 13F filing with the SEC. The firm acquired 2,094,404 shares of the basic materials company's stock, valued at approximately $6,011,000. Gerdau accounts for about 13.4% of Kawa Capital Management Inc's portfolio, making the stock its 5th largest position. Kawa Capital Management Inc owned about 0.10% of Gerdau at the end of the most recent quarter.

Other institutional investors and hedge funds also recently modified their holdings of the company. Two Sigma Investments LP raised its stake in Gerdau by 49.9% in the fourth quarter. Two Sigma Investments LP now owns 14,804,499 shares of the basic materials company's stock valued at $42,637,000 after buying an additional 4,928,378 shares during the period. Two Sigma Advisers LP raised its stake in Gerdau by 107.4% in the 4th quarter. Two Sigma Advisers LP now owns 12,645,660 shares of the basic materials company's stock valued at $36,420,000 after acquiring an additional 6,548,200 shares during the period. Encompass Capital Advisors LLC bought a new stake in Gerdau in the 1st quarter valued at $30,134,000. Bank of America Corp DE lifted its holdings in Gerdau by 130.6% during the 4th quarter. Bank of America Corp DE now owns 10,095,722 shares of the basic materials company's stock valued at $29,076,000 after purchasing an additional 5,718,323 shares during the last quarter. Finally, Carrhae Capital LLP bought a new position in Gerdau during the first quarter worth $18,655,000. 1.49% of the stock is owned by institutional investors.

Analyst Ratings Changes

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

Gerdau Price Performance

Shares of NYSE:GGB traded up $0.02 during midday trading on Wednesday, hitting $3.16. The stock had a trading volume of 9,273,713 shares, compared to its average volume of 11,457,046. The company's 50-day moving average price is $3.01 and its 200-day moving average price is $2.87. Gerdau S.A. has a fifty-two week low of $2.27 and a fifty-two week high of $3.62. The company has a quick ratio of 1.50, a current ratio of 2.89 and a debt-to-equity ratio of 0.30. The company has a market capitalization of $6.30 billion, a P/E ratio of 10.88, a price-to-earnings-growth ratio of 0.77 and a beta of 1.38.

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 the consensus estimate 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 during the quarter, compared to the consensus estimate of $3.22 billion. As a group, equities research analysts predict that Gerdau S.A. will post 0.46 EPS for the current fiscal year.

Gerdau Increases Dividend

The company also recently declared a quarterly dividend, which was paid on Monday, August 25th. Stockholders of record on Wednesday, August 13th were paid a $0.0216 dividend. This represents a $0.09 dividend on an annualized basis and a dividend yield of 2.7%. The ex-dividend date was Wednesday, August 13th. This is a positive change from Gerdau's previous quarterly dividend of $0.02. Gerdau's dividend payout ratio is currently 27.59%.

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.