Gerdau SA (GGB): Today's Featured Metals & Mining Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Gerdau ( GGB) pushed the Metals & Mining industry lower today making it today's featured Metals & Mining laggard. The industry as a whole closed the day up 0.1%. By the end of trading, Gerdau fell 13 cents (-1.3%) to $9.92 on average volume. Throughout the day, 7.4 million shares of Gerdau exchanged hands as compared to its average daily volume of 7.6 million shares. The stock ranged in price between $9.77-$10.03 after having opened the day at $10.03 as compared to the previous trading day's close of $10.05. Other companies within the Metals & Mining industry that declined today were: Augusta Resource Corporation ( AZC), down 13.8%, China Gengsheng Minerals ( CHGS), down 10.2%, Sutor Technology Group ( SUTR), down 6.8%, and Gold Standard Ventures ( GSV), down 5.5%.

Gerdau S.A. engages in the production and sale of steel products in Brazil and internationally. Gerdau has a market cap of $16.34 billion and is part of the basic materials sector. The company has a P/E ratio of 8.3, below the average metals & mining industry P/E ratio of 14.6 and below the S&P 500 P/E ratio of 17.7. Shares are up 25.4% year to date as of the close of trading on Friday. Currently there is one analyst that rates Gerdau a buy, no analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates Gerdau as a hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and deteriorating net income.

On the positive front, Claude Resources ( CGR), up 6.4%, Silver Standard Resources ( SSRI), up 5.9%, Oxford Resource Partners ( OXF), up 5.8%, and Quaterra Resources ( QMM), up 5.7%, were all gainers within the metals & mining industry with Barrick Gold Corporation ( ABX) being today's featured metals & mining industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the metals & mining industry could consider SPDR S&P Metals & Mining ETF ( XME) while those bearish on the metals & mining industry could consider PowerShares DB Base Metals Sht ETN ( BOS).
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