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 down 0.4%. By the end of trading, Gerdau fell $0.14 (-2.3%) to $5.92 on average volume. Throughout the day, 5,031,496 shares of Gerdau exchanged hands as compared to its average daily volume of 5,265,900 shares. The stock ranged in price between $5.86-$5.99 after having opened the day at $5.98 as compared to the previous trading day's close of $6.06. Other companies within the Metals & Mining industry that declined today were: Crosshair Energy ( CXZ), down 35.0%, Ossen Innovation ( OSN), down 20.0%, China Gengsheng Minerals ( CHGS), down 15.3% and Cardero Resources Corporation ( CDY), down 13.0%.
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Gerdau S.A. engages in the production and commercialization of steel products worldwide. Gerdau has a market cap of $10.5 billion and is part of the basic materials sector. The company has a P/E ratio of 5.1, below the S&P 500 P/E ratio of 17.7. Shares are down 32.6% year to date as of the close of trading on Friday. Currently there are 2 analysts that rate Gerdau a buy, no analysts rate it a sell, and 2 rate it a hold.

TheStreet Ratings rates Gerdau as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and poor profit margins.

On the positive front, Prospect Global Resources ( PGRX), down 16.9%, Minco Gold Corporation ( MGH), down 11.7%, Silver Bull Resources ( SVBL), down 7.4% and Timberline Resources Corporation ( TLR), down 7.2% , were all gainers within the metals & mining industry with Molycorp ( MCP) 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).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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