Gerdau (NYSE:GGB) Stock Price Passes Above 200-Day Moving Average - Here's Why

Key Points

• Gerdau shares rose above their 200-day moving average, trading as high as $4.30 and last changing hands at $4.2750. The move came on heavy volume of 16.8 million shares.
• Analysts are generally more bullish on the stock, with recent upgrades and higher price targets from firms including Itau BBA, JPMorgan, UBS, and Scotiabank. MarketBeat shows a consensus rating of Moderate Buy with an average target price of $5.28.
• The company recently raised its quarterly dividend to $0.0361 per share, implying an annualized yield of about 3.4%. However, its latest earnings missed estimates, with EPS of $0.10 versus the expected $0.15.

Shares of Gerdau S.A. (NYSE:GGB - Get Free Report) crossed above its two hundred day moving average during trading on Tuesday . The stock has a two hundred day moving average of $4.15 and traded as high as $4.30. Gerdau shares last traded at $4.2750, with a volume of 16,823,346 shares.

Analyst Ratings Changes

A number of equities research analysts recently issued reports on the stock. Itau BBA Securities upgraded shares of Gerdau from a "market perform" rating to an "outperform" rating and set a $4.60 target price for the company in a report on Wednesday, April 1st. JPMorgan Chase & Co. lifted their price target on shares of Gerdau from $5.50 to $6.00 and gave the company an "overweight" rating in a report on Thursday, June 25th. UBS Group reissued a "buy" rating and set a $5.25 price objective (up from $4.60) on shares of Gerdau in a research note on Wednesday, April 29th. Scotiabank upgraded Gerdau from a "hold" rating to a "strong-buy" rating in a report on Thursday, March 26th. Finally, Weiss Ratings reaffirmed a "hold (c)" rating on shares of Gerdau in a research report on Wednesday, June 24th. One analyst has rated the stock with a Strong Buy rating, three have given a Buy rating and two have issued a Hold rating to the company's stock. According to MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus target price of $5.28.

Gerdau Stock Performance

The stock's 50-day moving average is $4.52 and its 200-day moving average is $4.15. 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 stock has a market cap of $8.55 billion, a price-to-earnings ratio of 26.72 and a beta of 1.50.

Gerdau (NYSE:GGB - Get Free Report) last announced its quarterly earnings results on Tuesday, April 28th. The basic materials company reported $0.10 earnings per share for the quarter, missing analysts' consensus estimates of $0.15 by ($0.05). Gerdau had a net margin of 2.40% and a return on equity of 6.76%. The business had revenue of $3.22 billion for the quarter, compared to analyst estimates of $3.36 billion. On average, analysts expect that Gerdau S.A. will post 0.54 EPS for the current year.

Gerdau Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Tuesday, June 16th. Investors of record on Friday, May 15th were given a dividend of $0.0361 per share. This is a positive change from Gerdau's previous quarterly dividend of $0.02. The ex-dividend date of this dividend was Friday, May 15th. This represents a $0.14 dividend on an annualized basis and a yield of 3.4%. Gerdau's dividend payout ratio is currently 75.00%.

Insider Transactions at Gerdau

In related news, CEO Cunha Gustavo Werneck Da bought 165,224 shares of the firm's stock in a transaction dated Friday, June 12th. The stock was bought at an average price of $4.73 per share, with a total value of $781,509.52. Following the completion of the transaction, the chief executive officer directly owned 165,224 shares of the company's stock, valued at approximately $781,509.52. This represents a ∞ increase in their ownership of the stock. The acquisition was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, EVP Mauricio Metz sold 7,000 shares of the stock in a transaction dated Tuesday, June 2nd. The shares were sold at an average price of $4.85, for a total value of $33,950.00. Following the completion of the sale, the executive vice president owned 22,536 shares of the company's stock, valued at approximately $109,299.60. This trade represents a 23.70% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 710,184 shares of company stock worth $3,360,776 in the last quarter. 0.02% of the stock is owned by corporate insiders.

Institutional Trading of Gerdau

Several large investors have recently bought and sold shares of the company. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. lifted its position in shares of Gerdau by 68.9% during the second quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 9,634 shares of the basic materials company's stock worth $28,000 after purchasing an additional 3,931 shares in the last quarter. EverSource Wealth Advisors LLC grew its holdings in 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 purchasing an additional 5,216 shares in the last quarter. Greenspring Advisors LLC purchased a new stake in Gerdau during the 4th quarter worth $40,000. Caitong International Asset Management Co. Ltd purchased a new stake in Gerdau during the 3rd quarter worth $34,000. Finally, Coldstream Capital Management Inc. acquired a new position in Gerdau in the 3rd quarter worth $37,000. Institutional investors and hedge funds own 1.49% of the company's stock.

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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