Gerdau (NYSE:GGB) Trading 6.5% Higher - What's Next?

Key Points

• Gerdau shares jumped 6.5% to about $4.995, despite trading volume falling 93% below its average. The stock remains above its 50-day and 200-day moving averages.
• Analyst sentiment is largely cautious: several firms downgraded the stock to “neutral,” “hold,” or “market perform.” Gerdau has an average “Hold” rating and a $5.45 consensus price target.
• The company met quarterly EPS expectations at $0.15 and slightly exceeded revenue forecasts, while increasing its quarterly dividend to $0.0448—an annualized yield of approximately 3.6%.

Shares of Gerdau S.A. (NYSE:GGB - Get Free Report) shot up 6.5% during trading on Wednesday . The company traded as high as $4.99 and last traded at $4.9950. Approximately 1,273,163 shares traded hands during trading, a decline of 93% from the average daily volume of 17,799,162 shares. The stock had previously closed at $4.69.

Analyst Ratings Changes

Several equities analysts have weighed in on GGB shares. The Goldman Sachs Group cut shares of Gerdau to a "neutral" rating in a research report on Monday, August 24th. Bank of America downgraded Gerdau from a "buy" rating to a "neutral" rating and set a $5.10 price target on the stock. in a report on Thursday, August 20th. Itau BBA Securities lowered Gerdau from an "outperform" rating to a "market perform" rating in a research report on Monday, August 10th. HSBC downgraded Gerdau from a "buy" rating to a "hold" rating in a research note on Thursday, August 20th. Finally, Weiss Ratings raised Gerdau from a "hold (c)" rating to a "hold (c+)" rating in a research note on Wednesday, August 5th. One equities 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's stock. Based on data from MarketBeat, the company currently has an average rating of "Hold" and an average price target of $5.45.

Gerdau Trading Up 5.2%

The company has a fifty day simple moving average of $4.59 and a two-hundred day simple moving average of $4.33. The company has a market capitalization of $9.69 billion, a P/E ratio of 21.41 and a beta of 1.49. The company has a debt-to-equity ratio of 0.26, a current ratio of 2.87 and a quick ratio of 1.30.

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 (EPS) 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 S.A. will post 0.53 earnings per share for the current fiscal year.

Gerdau Increases Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Friday, September 18th. Stockholders of record on Friday, August 21st will be paid a $0.0448 dividend. The ex-dividend date is Friday, August 21st. This is a boost from Gerdau's previous quarterly dividend of $0.04. This represents a $0.18 dividend on an annualized basis and a dividend yield of 3.6%. Gerdau's dividend payout ratio is presently 65.22%.

Insider Buying and Selling

In other Gerdau news, CEO Cunha Gustavo Werneck Da acquired 165,224 shares of the business's stock in a transaction that occurred on Friday, June 12th. The stock was acquired at an average price of $4.73 per share, with a total value of $781,509.52. Following the transaction, the chief executive officer owned 165,224 shares of the company's stock, valued at approximately $781,509.52. This trade represents a ∞ increase in their ownership of the stock. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, insider Marcos Zilles Mattiello sold 10,387 shares of the firm's stock in a transaction that occurred on Monday, June 8th. The shares were sold at an average price of $5.11, for a total value of $53,077.57. Additional details regarding this sale are available in the official SEC disclosure. 0.02% of the stock is owned by insiders.

Hedge Funds Weigh In On Gerdau

Several institutional investors and hedge funds have recently added to or reduced their stakes in GGB. Donald Smith & CO. Inc. bought a new stake in shares of Gerdau in the 2nd quarter worth approximately $70,663,000. Bank of America Corp DE raised its stake in shares of Gerdau by 11,393.6% in the first quarter. Bank of America Corp DE now owns 13,222,623 shares of the basic materials company's stock valued at $47,734,000 after purchasing an additional 13,107,580 shares in the last quarter. Renaissance Technologies LLC lifted its position in Gerdau by 76.1% in the first quarter. Renaissance Technologies LLC now owns 10,936,524 shares of the basic materials company's stock worth $39,481,000 after purchasing an additional 4,725,200 shares during the period. Assenagon Asset Management S.A. bought a new position in Gerdau in the second quarter worth $16,291,000. Finally, Kapitalo Investimentos Ltda acquired a new stake in Gerdau during the first quarter worth $9,618,000. 1.49% of the stock is currently owned by institutional investors.

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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