Gerdau (NYSE:GGB) Hits New 52-Week High - Still a Buy?

Key Points

• Gerdau (NYSE:GGB) hit a new 52-week high, trading as high as $4.72 (last $4.7150) on heavy volume (~6,736,003 shares); analysts have been upgrading the stock and the consensus rating is a Moderate Buy with a $5.12 price target.
• Earnings missed estimates: latest quarter EPS was $0.10 vs. $0.15 expected and revenue was $3.22B vs. $3.36B expected; the company has a $9.6B market cap and a trailing P/E of 30.03, while analysts forecast $0.51 EPS for the year.
• Dividend hike and insider selling: quarterly dividend raised to $0.0361 (annualized $0.14, ~3.0% yield) from $0.02, but insiders sold 344,002 shares in the last three months and insiders now own just 0.02% of the stock.

Shares of Gerdau S.A. (NYSE:GGB - Get Free Report) reached a new 52-week high during mid-day trading on Tuesday . The company traded as high as $4.72 and last traded at $4.7150, with a volume of 6736003 shares trading hands. The stock had previously closed at $4.50.

Analyst Upgrades and Downgrades

A number of equities research analysts recently issued reports on the company. Weiss Ratings reaffirmed a "hold (c)" rating on shares of Gerdau in a research note on Friday, March 27th. Itau BBA Securities raised Gerdau from a "market perform" rating to an "outperform" rating and set a $4.60 target price on the stock in a research note on Wednesday, April 1st. JPMorgan Chase & Co. upped their target price on Gerdau from $5.00 to $5.50 and gave the company an "overweight" rating in a research note on Monday, April 13th. Scotiabank raised Gerdau from a "hold" rating to a "strong-buy" rating in a research note on Thursday, March 26th. Finally, UBS Group reaffirmed a "buy" rating and issued a $5.25 target price (up from $4.60) on shares of Gerdau in a research note on Wednesday, April 29th. One research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating and two have assigned a Hold rating to the company. According to MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus price target of $5.12.

Gerdau Price Performance

The stock has a market capitalization of $9.60 billion, a PE ratio of 30.03 and a beta of 1.51. The company has a current ratio of 2.76, a quick ratio of 1.29 and a debt-to-equity ratio of 0.26. The company's 50 day simple moving average is $3.87 and its 200 day simple moving average is $3.82.

Gerdau (NYSE:GGB - Get Free Report) last released its earnings results on Monday, April 27th. The basic materials company reported $0.10 EPS for the quarter, missing the consensus estimate of $0.15 by ($0.05). The firm had revenue of $3.22 billion during the quarter, compared to analysts' expectations of $3.36 billion. Gerdau had a return on equity of 6.76% and a net margin of 2.40%. On average, equities analysts anticipate that Gerdau S.A. will post 0.51 earnings per share for the current year.

Gerdau Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Tuesday, June 16th. Shareholders of record on Friday, May 15th will be paid a $0.0361 dividend. This represents a $0.14 annualized dividend and a yield of 3.0%. The ex-dividend date of this dividend is Friday, May 15th. This is an increase from Gerdau's previous quarterly dividend of $0.02. Gerdau's dividend payout ratio is presently 37.50%.

Insider Transactions at Gerdau

In other Gerdau news, CEO Cunha Gustavo Werneck Da sold 50,000 shares of Gerdau stock in a transaction that occurred on Wednesday, April 8th. The shares were sold at an average price of $4.01, for a total value of $200,500.00. Following the completion of the sale, the chief executive officer directly owned 138,080 shares of the company's stock, valued at approximately $553,700.80. The trade was a 26.58% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, Chairman Guilherme Chagas G. Johannpeter sold 85,607 shares of Gerdau stock in a transaction that occurred on Friday, March 20th. The stock was sold at an average price of $3.29, for a total transaction of $281,647.03. The SEC filing for this sale provides additional information. Insiders sold 344,002 shares of company stock worth $1,390,396 in the last three months. 0.02% of the stock is currently owned by company insiders.

Institutional Trading of Gerdau

Several institutional investors have recently made changes to their positions in GGB. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its stake in shares of Gerdau by 68.9% during the 2nd quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 9,634 shares of the basic materials company's stock valued at $28,000 after buying an additional 3,931 shares during the period. EverSource Wealth Advisors LLC grew its stake in shares of Gerdau by 95.3% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 10,687 shares of the basic materials company's stock valued at $31,000 after buying an additional 5,216 shares during the period. Wealthstream Advisors Inc. purchased a new stake in shares of Gerdau during the 3rd quarter valued at $32,000. Aster Capital Management DIFC Ltd purchased a new stake in shares of Gerdau during the 3rd quarter valued at $34,000. Finally, Caitong International Asset Management Co. Ltd purchased a new stake in shares of Gerdau during the 3rd quarter valued at $34,000. 1.49% of the stock is owned by hedge funds and other institutional investors.

About Gerdau

Gerdau SA is a Brazilian-based steel producer engaged in the manufacture and distribution of long steel products for the construction, industrial and agricultural sectors. Established in 1901, the company operates an integrated network of electric-arc furnaces and rolling mills, producing reinforcement bars, wire rod, merchant bars and structural shapes. Gerdau's product portfolio also includes specialty long steel, high-yield reinforcement, rail, beams and steel coils, as well as value-added processing services such as cutting, bending and coating.

The company has expanded its footprint beyond Brazil, with significant operations in North America, South America and a presence in select European markets.

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