U.S. markets closed
  • S&P 500

    3,841.94
    +73.47 (+1.95%)
     
  • Dow 30

    31,496.30
    +572.16 (+1.85%)
     
  • Nasdaq

    12,920.15
    +196.68 (+1.55%)
     
  • Russell 2000

    2,192.21
    +45.29 (+2.11%)
     
  • Crude Oil

    66.28
    +2.45 (+3.84%)
     
  • Gold

    1,698.20
    -2.50 (-0.15%)
     
  • Silver

    25.30
    -0.17 (-0.65%)
     
  • EUR/USD

    1.1916
    -0.0063 (-0.52%)
     
  • 10-Yr Bond

    1.5540
    +0.0040 (+0.26%)
     
  • GBP/USD

    1.3834
    -0.0060 (-0.43%)
     
  • USD/JPY

    108.3600
    +0.3840 (+0.36%)
     
  • BTC-USD

    50,974.39
    +3,315.77 (+6.96%)
     
  • CMC Crypto 200

    982.93
    +39.75 (+4.21%)
     
  • FTSE 100

    6,630.52
    -20.36 (-0.31%)
     
  • Nikkei 225

    28,864.32
    -65.78 (-0.23%)
     

Reliance Steel (RS) Completes Buyout of Fry Steel Company

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
  • Oops!
    Something went wrong.
    Please try again later.
  • 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 announced that it purchased all of Fry Steel Company’s outstanding capital stock effective Dec 31, 2019. However, the terms of the deal have been kept under wraps. Notably, Fry Steel’s owner and CEO, retired after the deal was closed.

Fry Steel is a general line and long bar supplier based in Santa Fe Springs, CA. It provides next-day “in-stock” delivery via its proprietary fleet of trucks. The company has developed a reputation for outstanding customer service and stocking hard-to-find items. Notably, Fry Steel’s net sales for the year ended Dec 31, 2019 were roughly $100 million.

Per Reliance Steel’s management, the acquisition is in sync with its business model and strategy of investing in high quality and high margin businesses.

Reliance Steel’s shares have surged 71.1% in the past year compared with the industry’s growth of 73.9%.

In October 2019, the company mentioned that it is optimistic regarding business prospects in fourth-quarter 2019. Excluding the impact of normal seasonal patterns, the company expects end demand to stay relatively steady in the fourth quarter compared with the prior quarter.

For the fourth quarter, Reliance Steel expects a sequential decrease of 4-7% in total tons sold. Overall metal pricing is anticipated to remain near the current level, which is likely to result in a sequential decline of 2-3% in its average selling price per ton sold.

Based on these expectations, the company projects adjusted earnings per share (EPS) of $1.60-$1.70 for the fourth quarter.

Reliance Steel & Aluminum Co. Price and Consensus

 

Reliance Steel & Aluminum Co. Price and Consensus
Reliance Steel & Aluminum Co. Price and Consensus

Reliance Steel & Aluminum Co. price-consensus-chart | Reliance Steel & Aluminum Co. Quote

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks worth considering in the basic materials space include Daqo New Energy Corp. DQ, Pan American Silver Corp. PAAS and Sibanye Gold Limited SBGL, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Daqo New Energy has projected earnings growth rate of 294.7% for 2020. The company’s shares have rallied 122% in a year’s time.

Pan American Silver has estimated earnings growth rate of 38.1% for 2020. The company’s shares have surged 57% in a year’s time.

Sibanye Gold has projected earnings growth rate of 587.5% for 2020. The company’s shares have soared 232% over a 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
 
DAQO New Energy Corp. (DQ) : Free Stock Analysis Report
 
Sibanye Gold Limited (SBGL) : Free Stock Analysis Report
 
Pan American Silver Corp. (PAAS) : Free Stock Analysis Report
 
Reliance Steel & Aluminum Co. (RS) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.