Schnitzer Steel Industries Inc

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SCHN : NASDAQ : Basic Materials
$27.65 | %
Today's Range: 27.13 - 27.85
Avg. Daily Volume: 432000.0
09/22/17 - 4:00 PM ET

Financial Analysis


SCHNITZER STEEL INDS's gross profit margin for the third quarter of its fiscal year 2017 has decreased when compared to the same period a year ago. Even though it increased sales and net income significantly, the company was unable to grow at a faster pace than its industry competitors. SCHNITZER STEEL INDS has weak liquidity. Currently, the Quick Ratio is 1.00 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 5.82% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q3 FY17 Q3 FY16
Net Sales ($mil)477.09351.61
EBITDA ($mil)29.8528.16
EBIT ($mil)17.5315.17
Net Income ($mil)16.5711.0


Balance Sheet Q3 FY17 Q3 FY16
Cash & Equiv. ($mil)15.217.02
Total Assets ($mil)921.23876.44
Total Debt ($mil)184.44202.72
Equity ($mil)513.06484.8


Profitability Q3 FY17 Q3 FY16
Gross Profit Margin16.4119.87
EBITDA Margin6.258.0
Operating Margin3.674.31
Sales Turnover1.721.62
Return on Assets4.6-2.83
Return on Equity8.34-4.68
Debt Q3 FY17 Q3 FY16
Current Ratio2.312.56
Debt/Capital0.260.29
Interest Expense2.132.14
Interest Coverage8.237.1


Share Data Q3 FY17 Q3 FY16
Shares outstanding (mil)27.0426.76
Div / share0.190.19
EPS0.60.41
Book value / share18.9718.12
Institutional Own % n/a n/a
Avg Daily Volume443502.0439985.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 40.62 for the Metals & Mining industry and a discount compared to the S&P 500 average of 24.88. Conducting a second comparison, its price-to-book ratio of 1.38 indicates a significant discount versus the S&P 500 average of 3.10 and a discount versus the industry average of 1.90. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, SCHNITZER STEEL INDS proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SCHN 16.98 Peers 40.62   SCHN 7.09 Peers 11.98

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

SCHN is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

SCHN is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
SCHN 15.42 Peers 27.51   SCHN NM Peers 0.62

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

SCHN is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

SCHN's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SCHN 1.38 Peers 1.90   SCHN 283.33 Peers 1398.57

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

SCHN is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, SCHN is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
SCHN 0.45 Peers 3.07   SCHN 11.63 Peers 23.20

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

SCHN is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

SCHN significantly trails its peers on the basis of sales growth

 

 

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