Here's How Much a $1000 Investment in Reliance Steel Made 10 Years Ago Would Be Worth Today
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Reliance Steel (RS) ten years ago? It may not have been easy to hold on to RS for all that time, but if you did, how much would your investment be worth today?
Reliance Steel's Business In-Depth
With that in mind, let's take a look at Reliance Steel's main business drivers.
Los Angeles, CA-based Reliance Steel & Aluminum Co. is a leading metals service center company engaged in value-added materials management and metals processing services. It also distributes over 100,000 metal products to more than 125,000 customers across a vast spectrum of industries. Reliance Steel is the biggest North American metals service center company based on revenues with more than 300 locations.
Reliance Steel recorded net sales of $17,025 million in 2022. Its major products are carbon steel (52% of 2022 sales), aluminum (16%), stainless steel (16%) and alloy (5%).
Reliance has 200 processing and distribution centers spread across 39 states in the United States and in foreign countries such as Belgium, Canada, China, Malaysia, Mexico, Singapore, South Korea and the United Kingdom. Although the company has a diverse geographic presence, the southeastern region of the United States generates majority of its sales.
Reliance Steel provides metals processing services such as cutting-to-length, blanking, slitting, burning, plasma burning, and precision plate sawing, sawing, and shearing, among others, all to customer specifications. These services save time and labor and reduce overall manufacturing costs for the customer.
The company improves its operating results through strategic acquisitions and the expansion of its existing operations. It has made 59 acquisitions since its 1994 Initial public offering (IPO).
The company, in March 2018, completed its purchase of all of the issued and outstanding capital stock of DuBose National Energy Services, Inc. (DuBose Energy) and its affiliate, DuBose National Energy Fasteners & Machined Parts, Inc. (DuBose Fasteners) for an undisclosed price. DuBose Energy and DuBose Fasteners specialize in fabrication, supply and distribution of metal and metal products to the nuclear industry including utilities, component manufacturers and contractors.
Moreover, Reliance Steel, in November 2018, completed the purchase of all of the membership interests of All Metals Holding, LLC, including its operating subsidiaries, All Metals Processing & Logistics, Inc. (“AMPL”) and All Metals Transportation and Logistics, Inc. (“AMTL”). AMPL specializes in toll processing for automotive, construction, appliance and other diverse-end markets.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Reliance Steel ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in July 2013 would be worth $4,142.62, or a 314.26% gain, as of July 3, 2023, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 177.06% and the price of gold went up 49.67% over the same time frame.
Analysts are anticipating more upside for RS.
Earnings estimates for Reliance Steel for the second quarter have been going down over the past month. The company is seeing a strong rebound in non-residential construction, its largest market. Demand in this market is expected to remain strong in 2023 on healthy bidding activities. It is also witnessing steady demand in automotive and a recovery in commercial aerospace and energy. It is expected to gain from robust demand in the majority of its end markets in 2023. Reliance Steel also remains focused on enhancing its operating results through acquisitions. Further, the company is committed to offering incremental returns to its shareholders, leveraging strong cash flows. However, supply-chain and labor disruptions and higher input costs are concerns. Weaker year-over-year selling prices might also adversely impact second-quarter margins.
The stock is up 12.37% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 2 higher, for fiscal 2023. The consensus estimate has moved up as well.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Reliance Steel & Aluminum Co. (RS) : Free Stock Analysis Report
