Gerdau S.A. (NYSE:GGB) Short Interest Up 54.2% in July

Key Points

• Short interest surged 54.2% in July to 36.6 million shares, representing 1.8% of Gerdau’s outstanding stock and 2.6 days of average trading volume to cover.
• Analyst sentiment remains moderately positive, with an average “Moderate Buy” rating and a consensus price target of $5.28; Gerdau recently reported earnings in line with estimates and revenue above expectations.
• Gerdau increased its quarterly dividend to $0.0448 per share, implying an annualized yield of approximately 3.7%, while insiders sold 68,322 shares over the past quarter.

Gerdau S.A. (NYSE:GGB - Get Free Report) was the recipient of a large growth in short interest during the month of July. As of July 31st, there was short interest totaling 36,620,373 shares, a growth of 54.2% from the July 15th total of 23,746,851 shares. Currently, 1.8% of the company's stock are short sold. Based on an average daily volume of 14,337,053 shares, the days-to-cover ratio is currently 2.6 days.

Analyst Upgrades and Downgrades

GGB has been the subject of a number of recent analyst reports. JPMorgan Chase & Co. increased their price target on shares of Gerdau from $5.50 to $6.00 and gave the company an "overweight" rating in a research note on Thursday, June 25th. Weiss Ratings raised shares of Gerdau from a "hold (c)" rating to a "hold (c+)" rating in a report on Wednesday, August 5th. Itau BBA Securities downgraded shares of Gerdau from an "outperform" rating to a "market perform" rating in a research note on Monday, August 10th. Finally, UBS Group reiterated a "buy" rating and set a $5.25 price target (up from $4.60) on shares of Gerdau in a report on Wednesday, April 29th. One investment analyst has rated the stock with a Strong Buy rating, two have given a Buy rating and three have given a Hold rating to the company's stock. Based on data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average target price of $5.28.

Gerdau Trading Up 0.5%

Shares of Gerdau stock opened at $4.83 on Tuesday. Gerdau has a 12-month low of $2.85 and a 12-month high of $5.18. The company has a market capitalization of $9.65 billion, a price-to-earnings ratio of 20.93 and a beta of 1.48. The company has a quick ratio of 1.30, a current ratio of 2.87 and a debt-to-equity ratio of 0.26. The firm's 50-day moving average price is $4.58 and its two-hundred day moving average price is $4.32.

Gerdau (NYSE:GGB - Get Free Report) last posted its quarterly earnings data on Tuesday, August 4th. The basic materials company reported $0.15 earnings per share for the quarter, hitting the consensus estimate of $0.15. The business had revenue of $3.45 billion during the quarter, compared to the consensus estimate of $3.41 billion. Gerdau had a net margin of 3.37% and a return on equity of 7.97%. On average, analysts forecast that Gerdau will post 0.53 earnings per share for the current fiscal year.

Gerdau Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Friday, September 18th. Investors of record on Friday, August 21st will be issued a dividend of $0.0448 per share. The ex-dividend date of this dividend is Friday, August 21st. This is an increase from Gerdau's previous quarterly dividend of $0.04. This represents a $0.18 dividend on an annualized basis and a yield of 3.7%. Gerdau's dividend payout ratio is presently 52.17%.

Insider Activity at Gerdau

In other news, insider Chia Yuan Wang sold 30,935 shares of the company's stock in a transaction that occurred on Tuesday, June 2nd. The stock was sold at an average price of $4.49, for a total transaction of $138,898.15. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, EVP Mauricio Metz sold 7,000 shares of the stock in a transaction that occurred on 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 directly owned 22,536 shares of the company's stock, valued at approximately $109,299.60. The trade was a 23.70% decrease in their position. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 68,322 shares of company stock worth $324,176. Insiders own 0.02% of the company's stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently made changes to their positions in the company. AQR Capital Management LLC boosted its stake in Gerdau by 65.9% in the 1st quarter. AQR Capital Management LLC now owns 582,949 shares of the basic materials company's stock worth $1,656,000 after purchasing an additional 231,588 shares during the period. Millennium Management LLC raised its position in Gerdau by 54.6% during the first quarter. Millennium Management LLC now owns 4,363,764 shares of the basic materials company's stock valued at $12,393,000 after acquiring an additional 1,541,311 shares in the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its stake in shares of Gerdau by 821.1% in the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 2,344,175 shares of the basic materials company's stock valued at $6,657,000 after purchasing an additional 2,089,675 shares during the last quarter. Sivia Capital Partners LLC acquired a new stake in shares of Gerdau in the second quarter worth about $51,000. Finally, Creative Planning grew its holdings in Gerdau by 88.8% during the second quarter. Creative Planning now owns 70,079 shares of the basic materials company's stock valued at $205,000 after purchasing an additional 32,961 shares during the last quarter. 1.49% of the stock is currently owned by institutional investors and hedge funds.

Gerdau Company Profile

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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