Short Interest in Gerdau S.A. (NYSE:GGB) Expands By 254.6%

Key Points

• Short interest in Gerdau surged 254.6% in June to 29.8 million shares, though that still represents just 1.5% of the float and about 1.6 days to cover.
• Insider activity was mixed: one executive sold shares in May, while CEO Cunha Gustavo Werneck Da bought 165,224 shares in June for about $781,510.
• Analysts remain cautiously positive, with a consensus Moderate Buy rating and an average price target of $5.28, while the company also recently raised its quarterly dividend to $0.0361 per share.

Gerdau S.A. (NYSE:GGB - Get Free Report) was the recipient of a large increase in short interest during the month of June. As of June 15th, there was short interest totaling 29,813,057 shares, an increase of 254.6% from the May 31st total of 8,407,063 shares. Currently, 1.5% of the company's shares are sold short. Based on an average daily trading volume, of 18,828,183 shares, the days-to-cover ratio is presently 1.6 days.

Insider Transactions at Gerdau

In other news, insider Cesar Obino Da Rosa Peres sold 8,000 shares of the business's stock in a transaction that occurred on Tuesday, May 19th. The stock was sold at an average price of $4.60, for a total transaction of $36,800.00. Following the transaction, the insider directly owned 8 shares of the company's stock, valued at approximately $36.80. The trade was a 99.90% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CEO Cunha Gustavo Werneck Da purchased 165,224 shares of the business's stock in a transaction that occurred on Friday, June 12th. The stock was bought at an average price of $4.73 per share, for a total transaction of $781,509.52. Following the acquisition, the chief executive officer owned 165,224 shares of the company's stock, valued at $781,509.52. This represents a ∞ increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. In the last quarter, insiders sold 794,184 shares of company stock worth $3,697,276. Corporate insiders own 0.02% of the company's stock.

Institutional Trading of Gerdau

A number of institutional investors and hedge funds have recently bought and sold shares of the company. AQR Capital Management LLC lifted its stake in shares of Gerdau by 65.9% in the first quarter. AQR Capital Management LLC now owns 582,949 shares of the basic materials company's stock worth $1,656,000 after buying an additional 231,588 shares in the last quarter. Millennium Management LLC increased its position in shares of 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 raised its holdings in 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 worth $6,657,000 after acquiring an additional 2,089,675 shares during the last quarter. Sivia Capital Partners LLC purchased a new position in Gerdau in the 2nd quarter worth approximately $51,000. Finally, Creative Planning lifted its position in Gerdau by 88.8% in the 2nd quarter. Creative Planning now owns 70,079 shares of the basic materials company's stock valued at $205,000 after acquiring an additional 32,961 shares in the last quarter. 1.49% of the stock is currently owned by institutional investors.

Analysts Set New Price Targets

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

Gerdau Stock Performance

Shares of GGB opened at $4.16 on Friday. The company has a quick ratio of 1.29, a current ratio of 2.76 and a debt-to-equity ratio of 0.26. The business's 50 day moving average price is $4.54 and its 200-day moving average price is $4.12. Gerdau has a 52 week low of $2.83 and a 52 week high of $4.98. The stock has a market cap of $8.31 billion, a P/E ratio of 25.97 and a beta of 1.48.

Gerdau (NYSE:GGB - Get Free Report) last announced its quarterly earnings data on Tuesday, April 28th. The basic materials company reported $0.10 earnings per share (EPS) 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 company had revenue of $3.22 billion for the quarter, compared to analysts' expectations of $3.36 billion. Equities research analysts anticipate that Gerdau will post 0.55 earnings per share for the current fiscal year.

Gerdau Increases Dividend

The company also recently disclosed 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 annualized dividend and a yield of 3.5%. Gerdau's payout ratio is currently 75.00%.

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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