Gerdau S.A. [GGB] is 7.71% higher this YTD. Is it still time to buy?

Gerdau S.A. [NYSE: GGB] loss -2.52% or -0.13 points to close at $5.03 with a heavy trading volume of 6741088 shares. The company report on December 1, 2020 that Gerdau S.A. Announces Results Of Early Tender Period Of The Cash Tender Offer For Certain Of The Outstanding 5.750% Bonds Due 2021, 4.750% Bonds Due 2023, 5.893% Bonds Due 2024 And 4.875% Bonds Due 2027 And Upsizing Of The Cash Tender Offer.

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Gerdau S.A. (Bovespa: GGBR, NYSE: GGB, Latibex: XGGB) (“Gerdau” or the “Company”) hereby announces the results of the early tender period under the previously announced offer by the Company to purchase for cash (the “Tender Offer”) up to a maximum tender consideration of U.S. $230,000,000 (including the Early Tender Payment, if applicable) of certain of the outstanding 5.750% Bonds due 2021 (the “2021 Bonds”) issued by Gerdau Trade Inc. (“GTI”), 4.750% Bonds due 2023 (the “2023 Bonds”) issued by GTI, 5.893% Bonds due 2024 (the “2024 Bonds”) issued jointly by Gerdau Holdings, Inc. (“GHI”) and GTL Trade Finance Inc., (“GTL”) and the 4.875% Bonds due 2027 (the “2027 Bonds”, and together with the 2021 Bonds, the 2023 Bonds and the 2024 Bonds, the “Bonds” and each, a “series” of Bonds) issued by GTI (GTI, GHI and GTL, collectively, the “Offerors”). The Tender Offer is being made pursuant to the offer to purchase dated November 16, 2020 (the “Offer to Purchase”). Capitalized terms used but not defined in this press release shall have the meanings assigned to them in the Offer to Purchase.

The Tender Offer was oversubscribed as of 5:00 P.M., New York City time, on the Early Tender Date. The Offerors have agreed, however, to increase the tender offer to accept for purchase an aggregate of U.S. $300,007,000 principal amount of the Bonds, so that the “Aggregate Maximum Tender Consideration” (as defined in the Offer to Purchase) has been increased to U.S.$ 335,887,519.22. Accordingly, the Company will not accept for purchase any additional Bonds tendered after the Early Tender Date. As the Tender Offer was oversubscribed, Bonds tendered at or prior to the Early Tender Date were accepted in accordance with the Acceptance Priority Level (as defined in the Offer to Purchase) and proration, in the amounts set forth in the table below. No 2023 Bonds or 2027 Bonds were accepted for purchase.

It opened the trading session at $5.04, the shares rose to $5.10 and dropped to $4.9601, the range by which the price of stock traded the whole day. The daily chart for GGB points out that the company has recorded 63.38% gains over the past six months. However, it is still -206.71% lower than its most recent low trading price.

If we look at the average trading volume of 4.93M shares, GGB reached to a volume of 6741088 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here is what top equities market gurus are saying about Gerdau S.A. [GGB]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for GGB shares is $5.30 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on GGB stock is a recommendation set at 2.50. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

Goldman have made an estimate for Gerdau S.A. shares, keeping their opinion on the stock as Neutral, with their previous recommendation back on January 13, 2021. The new note on the price target was released on December 15, 2020, representing the official price target for Gerdau S.A. stock.

The Average True Range (ATR) for Gerdau S.A. is set at 0.18, with the Price to Sales ratio for GGB stock in the period of the last 12 months amounting to 1.12. The Price to Book ratio for the last quarter was 1.48, with the Price to Cash per share for the same quarter was set at 0.81. Price to Free Cash Flow for GGB in the course of the last twelve months was 23.83 with Quick ratio for the last quarter at 1.40.

Trading performance analysis for GGB stock

Gerdau S.A. [GGB] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -4.91. With this latest performance, GGB shares gained by 11.32% in over the last four-week period, additionally plugging by 63.38% over the last 6 months – not to mention a drop of -1.27% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for GGB stock in for the last two-week period is set at 57.92, with the RSI for the last a single of trading hit 53.75, and the three-weeks RSI is set at 58.77 for Gerdau S.A. [GGB]. The present Moving Average for the last 50 days of trading for this stock 4.46, while it was recorded at 5.24 for the last single week of trading, and 3.42 for the last 200 days.

Gerdau S.A. [GGB]: A deeper dive into fundamental analysis

Operating Margin for any stock indicates how profitable investing would be, and Gerdau S.A. [GGB] shares currently have an operating margin of +6.94 and a Gross Margin at +10.60. Gerdau S.A.’s Net Margin is presently recorded at +3.04.

Return on Total Capital for GGB is now 6.48, given the latest momentum, and Return on Invested Capital for the company is 2.98. Return on Equity for this stock inclined to 4.57, with Return on Assets sitting at 2.29. When it comes to the capital structure of this company, Gerdau S.A. [GGB] has a Total Debt to Total Equity ratio set at 62.53. Additionally, GGB Total Debt to Total Capital is recorded at 38.47, with Total Debt to Total Assets ending up at 31.21. Long-Term Debt to Equity for the company is recorded at 55.98, with the Long-Term Debt to Total Capital now at 34.44.

Receivables Turnover for the company is 10.12 with a Total Asset Turnover recorded at a value of 0.75.Gerdau S.A.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 1.40 and a Current Ratio set at 2.40.

Gerdau S.A. [GGB]: An earnings per share (EPS) analysis

With the latest financial reports released by the company, Gerdau S.A. posted 0.05/share EPS, while the average EPS was predicted by analysts to be reported at 0.22/share. When compared, the two values demonstrate that the company fail the estimates by a Surprise Factor of -77.30%. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for GGB. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Gerdau S.A. go to 5.47%.

An analysis of insider ownership at Gerdau S.A. [GGB]

There are presently around $1,320 million, or 28.60% of GGB stock, in the hands of institutional investors. The top three institutional holders of GGB stocks are: CAPITAL INTERNATIONAL INVESTORS with ownership of 128,285,076, which is approximately 0.717% of the company’s market cap and around 32.70% of the total institutional ownership; JPMORGAN CHASE & CO, holding 24,030,995 shares of the stock with an approximate value of $120.88 million in GGB stocks shares; and CONTRARIAN CAPITAL MANAGEMENT, L.L.C., currently with $103.94 million in GGB stock with ownership of nearly -2.273% of the company’s market capitalization.

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Positions in Gerdau S.A. stocks held by institutional investors increased at the end of February and at the time of the February reporting period, where 59 institutional holders increased their position in Gerdau S.A. [NYSE:GGB] by around 24,497,075 shares. Additionally, 60 investors decreased positions by around 19,566,704 shares, while 23 investors held positions by with 218,418,992 shares. The mentioned changes placed institutional holdings at 262,482,771 shares, according to the latest SEC report filing. GGB stock had 18 new institutional investments in for a total of 1,930,320 shares, while 12 institutional investors sold positions of 3,823,278 shares during the same period.

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