U.S. Markets open in 6 hrs 58 mins

Reliance Steel Amends Credit Facility to Boost Liquidity

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Reliance Steel & Aluminum Co. RS recently stated that it has entered into an amended and restated $1.5-billion five-year unsecured revolving credit facility. The move will replace the existing credit agreement.

The amended facility enables prepayments and includes an option to increase for up to an additional $1 billion. Reliance Steel plans to use the funds borrowed under the facility for general corporate purpose as well as growth and stockholder return activities.

The company stated that the amended facility along with the net proceeds from its $900 million senior notes offering announced in July has considerably boosted its liquidity position. The move enables the company to successfully operate in unprecedented times and help to execute its capital allocation strategies.

Reliance Steel’s shares have gained 3.4% in the past year against the industry’s 23.9% decline.

 

In second-quarter 2020 earnings call, Reliance Steel did not provide any specific earnings per share guidance for the third quarter due to macroeconomic uncertainty stemming from the coronavirus pandemic.

The company expects overall demand to increase slightly in the third quarter from the second-quarter 2020 level. Shipping volumes are also expected to be affected by normal seasonal customer shutdowns and vacation schedules typical in the third quarter.

Further, the company anticipates overall metals pricing in the third quarter to remain in line with current levels. It anticipates gross profit margin to remain near the high end of 28-30%.

Zacks Rank & Stocks to Consider

Reliance Steel currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector are Astec Industries, Inc. ASTE, Silgan Holdings, Inc. SLGN, and SiteOne Landscape Supply, Inc. SITE. While Astec currently sports a Zacks Rank #1 (Strong Buy), Silgan and SiteOne carry a Zacks Rank of 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Astec has an estimated earnings growth rate of 13.6% for 2020. The company’s shares have rallied 68.5% in a year’s time.

Silgan has a projected earnings growth rate of 31.5% for 2020. The company’s shares have appreciated 24.9% in the past year.

SiteOne has an expected earnings growth rate of 16.7% for 2020. The stock has surged 45.6% in the past year.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>


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
 
Astec Industries, Inc. (ASTE) : Free Stock Analysis Report
 
Silgan Holdings Inc. (SLGN) : Free Stock Analysis Report
 
Reliance Steel Aluminum Co. (RS) : Free Stock Analysis Report
 
SiteOne Landscape Supply, Inc. (SITE) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research