Gerdau S.A. (NYSE:GGB) Sees Large Increase in Short Interest

Key Points

• Short interest in Gerdau S.A. increased significantly by 134.1% in August, totaling 21,230,000 shares by August 31st.
• UBS Group upgraded Gerdau's rating from "neutral" to "buy" with a price target raised from $2.90 to $3.80.
• The company recently declared a quarterly dividend increase to $0.0216, resulting in an annual yield of 2.8%.

Gerdau S.A. (NYSE:GGB - Get Free Report) was the target of a significant increase in short interest in the month of August. As of August 31st, there was short interest totaling 21,230,000 shares, an increase of 134.1% from the August 15th total of 9,070,000 shares. Approximately 1.7% of the shares of the stock are sold short. Based on an average trading volume of 12,240,000 shares, the days-to-cover ratio is currently 1.7 days. Based on an average trading volume of 12,240,000 shares, the days-to-cover ratio is currently 1.7 days. Approximately 1.7% of the shares of the stock are sold short.

Analysts Set New Price Targets

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

Institutional Inflows and Outflows

Large investors have recently modified their holdings of the business. Cambridge Investment Research Advisors Inc. boosted its position in shares of Gerdau by 80.4% during the first quarter. Cambridge Investment Research Advisors Inc. now owns 85,205 shares of the basic materials company's stock valued at $242,000 after buying an additional 37,969 shares during the period. Robeco Institutional Asset Management B.V. boosted its position in shares of Gerdau by 789.5% during the first quarter. Robeco Institutional Asset Management B.V. now owns 455,053 shares of the basic materials company's stock valued at $1,292,000 after buying an additional 403,894 shares during the period. Northern Trust Corp boosted its position in shares of Gerdau by 34.8% during the fourth quarter. Northern Trust Corp now owns 918,238 shares of the basic materials company's stock valued at $2,645,000 after buying an additional 236,951 shares during the period. Massachusetts Financial Services Co. MA boosted its position in shares of Gerdau by 147.9% during the first quarter. Massachusetts Financial Services Co. MA now owns 392,274 shares of the basic materials company's stock valued at $1,114,000 after buying an additional 234,015 shares during the period. Finally, Bank of America Corp DE boosted its position in shares of Gerdau by 130.6% during the fourth 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 buying an additional 5,718,323 shares during the period. Hedge funds and other institutional investors own 1.49% of the company's stock.

Gerdau Price Performance

Shares of Gerdau stock traded down $0.02 during trading on Thursday, reaching $3.12. 21,994,821 shares of the stock traded hands, compared to its average volume of 9,839,034. The company has a market capitalization of $6.23 billion, a price-to-earnings ratio of 10.76, a P/E/G ratio of 0.79 and a beta of 1.38. The business has a fifty day simple moving average of $3.01 and a two-hundred day simple moving average of $2.87. 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 has a 52-week low of $2.27 and a 52-week high of $3.62.

Gerdau (NYSE:GGB - Get Free Report) last released its quarterly earnings results on Thursday, July 31st. The basic materials company reported $0.08 EPS for the quarter, missing the consensus estimate of $0.09 by ($0.01). The company had revenue of $3.13 billion during the quarter, compared to analysts' expectations of $3.22 billion. Gerdau had a return on equity of 6.51% and a net margin of 4.81%. Sell-side analysts expect that Gerdau will post 0.46 EPS for the current year.

Gerdau Increases Dividend

The business also recently declared a quarterly dividend, which was paid on Monday, August 25th. Investors of record on Wednesday, August 13th were given a $0.0216 dividend. This is an increase from Gerdau's previous quarterly dividend of $0.02. This represents a $0.09 annualized dividend and a yield of 2.8%. The ex-dividend date was Wednesday, August 13th. Gerdau's dividend payout ratio (DPR) is 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.