NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins.
Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 444.09% to $21.42 million when compared to the same quarter last year. In addition, STEEL DYNAMICS INC has also vastly surpassed the industry average cash flow growth rate of -45.71%.
- STLD, with its decline in revenue, slightly underperformed the industry average of 1.6%. Since the same quarter one year prior, revenues slightly dropped by 1.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for STEEL DYNAMICS INC is currently extremely low, coming in at 12.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.30% significantly trails the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 36.13%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 56.52% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, STLD is still more expensive than most of the other companies in its industry.
Steel Dynamics, Inc., together with its subsidiaries, engages in the manufacture and sale of steel products in the United States and internationally. The company operates in three segments: Steel Operations, Metals Recycling and Ferrous Resources Operations, and Steel Fabrication Operations. The company has a P/E ratio of 10.3, below the average metals & mining industry P/E ratio of 11.1 and below the S&P 500 P/E ratio of 17.7. Steel Dynamics has a market cap of $2.34 billion and is part of the
industry. Shares are down 18.1% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff