Gerdau (NYSE:GGB) Stock Crosses Above Two Hundred Day Moving Average - Should You Sell?

Key Points

• Gerdau shares rose above their 200-day moving average, trading near $5.11 after reaching $5.13, compared with a 200-day average of $4.41.
• Analyst sentiment is mixed but leans toward caution: the stock has a consensus “Hold” rating and a $5.57 price target, with several firms recently downgrading the shares.
• Gerdau reported quarterly EPS in line with estimates and revenue above expectations, while increasing its quarterly dividend to $0.0448 per share, implying an annualized yield of about 3.5%.

Gerdau S.A. (NYSE:GGB - Get Free Report) shares passed above its two hundred day moving average during trading on Thursday . The stock has a two hundred day moving average of $4.41 and traded as high as $5.13. Gerdau shares last traded at $5.1050, with a volume of 9,587,349 shares trading hands.

Wall Street Analyst Weigh In

GGB has been the subject of several research analyst reports. Itau BBA Securities downgraded shares of Gerdau from an "outperform" rating to a "market perform" rating in a report on Monday, August 10th. HSBC cut shares of Gerdau from a "buy" rating to a "hold" rating in a report on Thursday, August 20th. UBS Group restated a "buy" rating and set a $6.10 price objective (up from $5.70) on shares of Gerdau in a research report on Thursday, August 27th. Bank of America cut Gerdau from a "buy" rating to a "neutral" rating and set a $5.10 price objective for the company. in a report on Thursday, August 20th. Finally, The Goldman Sachs Group downgraded Gerdau to a "neutral" rating in a research report on Monday, August 24th. One research analyst has rated the stock with a Strong Buy rating, two have given a Buy rating and six have issued a Hold rating to the company. According to MarketBeat.com, the company presently has a consensus rating of "Hold" and a consensus price target of $5.57.

Gerdau Stock Up 2.3%

The company has a current ratio of 2.87, a quick ratio of 1.30 and a debt-to-equity ratio of 0.26. The firm has a market cap of $10.02 billion, a price-to-earnings ratio of 22.20 and a beta of 1.49. The firm's 50 day simple moving average is $4.80 and its two-hundred day simple moving average is $4.41.

Gerdau (NYSE:GGB - Get Free Report) last announced its earnings results on Tuesday, August 4th. The basic materials company reported $0.15 EPS for the quarter, hitting the consensus estimate of $0.15. Gerdau had a net margin of 3.37% and a return on equity of 7.97%. The company had revenue of $3.45 billion for the quarter, compared to analysts' expectations of $3.41 billion. On average, equities analysts forecast that Gerdau S.A. will post 0.55 EPS for the current year.

Gerdau Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, September 18th. Investors of record on Friday, August 21st will be paid a $0.0448 dividend. This represents a $0.18 dividend on an annualized basis and a yield of 3.5%. This is a boost from Gerdau's previous quarterly dividend of $0.04. The ex-dividend date of this dividend is Friday, August 21st. Gerdau's payout ratio is presently 65.22%.

Insider Activity at Gerdau

In other news, CFO Rafael Japur sold 10,000 shares of the business's stock in a transaction that occurred on Thursday, August 6th. The shares were sold at an average price of $5.10, for a total value of $51,000.00. Following the completion of the transaction, the chief financial officer directly owned 86,967 shares in the company, valued at approximately $443,531.70. The trade was a 10.31% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Insiders own 0.02% of the company's stock.

Hedge Funds Weigh In On Gerdau

A number of institutional investors have recently modified their holdings of GGB. Greenspring Advisors LLC acquired a new position in Gerdau during the 4th quarter worth approximately $40,000. SmartHarvest Portfolios LLC bought a new stake in shares of Gerdau in the 1st quarter valued at about $43,000. Allspring Global Investments Holdings LLC acquired a new stake in shares of Gerdau in the first quarter valued at about $45,000. Bank of New York Mellon Corp acquired a new stake in Gerdau during the 1st quarter valued at approximately $46,000. Finally, EverSource Wealth Advisors LLC increased its position in shares of Gerdau by 57.6% during the first quarter. EverSource Wealth Advisors LLC now owns 13,243 shares of the basic materials company's stock worth $48,000 after buying an additional 4,842 shares during the period. Institutional investors and hedge funds own 1.49% of the company's stock.

Gerdau Company Profile

Gerdau SA is a Brazil-based steel producer whose American depositary shares trade on the New York Stock Exchange under the symbol GGB. The company manufactures and sells steel products for construction, industrial, agricultural, automotive and other end markets.

Its product portfolio includes long steel products such as rebar, wire rod, structural sections and merchant bars, as well as specialty steel and selected flat steel products. Gerdau also operates steel mills and scrap-processing facilities, using recycled ferrous scrap as an important raw material, and has activities connected with iron ore and other steelmaking inputs.

Founded in 1901, Gerdau has expanded from its Brazilian origins into one of the major steel producers in the Americas.

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