Gerdau S.A. (ADR) (NYSE:GGB)

CAPS Rating: 2 out of 5

The Company focuses on the decentralized production of long steel using electric arc furnace mini-mills and integrated mills with blast furnaces and continuous casting technology being used in both processes.

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Member Avatar stocky5 (37.99) Submitted: 10/27/2014 10:14:19 AM : Underperform Start Price: $4.52 GGB Score: +2.77

Don't be fooled by Brazil. This is a Marxist run country, and the day of reckoning has yet to arrive. Dilma's first term has been extended by the electorate, and Brazilians will be dealing with more than a collapse of their national soccer team. Brazil's only "promise" of the future is more of the same, where national resources can't hide the fact that about 90% of roads are covered in mud.

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Member Avatar elcid24 (75.18) Submitted: 9/24/2014 3:41:58 AM : Outperform Start Price: $5.11 GGB Score: -13.01

Over the past decade, ROE has ranged from 5% to about 40%, with ROE currently around 6%. Net income has ranged from $650M to about $2B. Current cash flows check in around $1.8B and net income is currently around $800M.

The Market Cap is $8.7B.

Gerdau has been able to maintain profitability - about 5-6% ROE, with book value slightly growing - during a fairly difficult period for steel producers. The steel industry, especially from a supply perspective, could get worse, but Gerdau's specialty steel products help to maintain superior pricing.

The company is only trading for 0.65x book value; the markets are expecting GGB to generate paltry returns on equity for the forseeable future. If it continues to generate depressed earnings, an investment could still do ok since you are buying at about 10-11x earnings. But if ROE returns to past norms (10-30%), then this stock could once again trade well above book value, creating a 1-2 bagger in the process.

Compared to Nucor, this stock looks incredibly undervalued. Arcelor Mittal can't compete with Gerdau on profitability. I think GBB is worth at least about $12B (10x pretax earnings), but give this a few years and we could see $16-20B potentially.

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Member Avatar adasand (42.03) Submitted: 8/7/2014 7:51:37 PM : Outperform Start Price: $5.77 GGB Score: -26.47

This is a really cheap stock, the company is still making a profit, the cash flow is excellent and Brazilian stocks have been depressed. A definite winner in the long term without a doubt.

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Member Avatar gtechie (57.61) Submitted: 9/24/2013 9:52:01 PM : Outperform Start Price: $7.44 GGB Score: -57.35

I have no clue about the company, just starting to watch it, and CAPS helps me do just that.

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Member Avatar mbway (< 20) Submitted: 11/22/2011 1:30:53 PM : Outperform Start Price: $7.41 GGB Score: -105.84

Market has over discounted GGB. Recent profits show adaptability to market conditions. Eventual economic growth will bring break out from depressed price.

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Member Avatar djemonk (< 20) Submitted: 8/10/2011 6:18:28 AM : Outperform Start Price: $6.71 GGB Score: -106.22

Price is overly punished, slowing china growth should bring down price of iron ore, DCF analysis values company much, much higher

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Member Avatar rscolesII (63.32) Submitted: 5/10/2011 1:20:20 AM : Outperform Start Price: $10.17 GGB Score: -103.44

Once brazil's economy settles stock will soar

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Member Avatar BMunkers (56.32) Submitted: 4/12/2011 9:44:22 PM : Underperform Start Price: $11.51 GGB Score: +112.03

Won't beat the S&P.

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Member Avatar btthus (20.81) Submitted: 4/1/2011 4:56:10 AM : Outperform Start Price: $11.99 GGB Score: -112.09

chart 2 + fundamentals

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Member Avatar MAKmeMONEY (24.54) Submitted: 11/23/2010 7:16:15 PM : Outperform Start Price: $11.59 GGB Score: -128.61

$0.02 below it's trailing P/E ratio! The new Brasil President will raise foreign import tariffs if they try dumping iron and steel here! Internal growth is good here even without export demand.

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Member Avatar jemsa (< 20) Submitted: 11/22/2010 3:40:14 PM : Outperform Start Price: $11.85 GGB Score: -128.19

Outoffavor

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Member Avatar Linsen83 (< 20) Submitted: 10/18/2010 6:32:25 PM : Outperform Start Price: $12.05 GGB Score: -132.96

Brazil is gearing up to host both the World Cup and the Olympics, that means massive investments in new facilities as well as general infrastructure. I expect steady increasing rev's for the next 4 years.

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Member Avatar Simbalion200 (20.73) Submitted: 4/14/2010 1:27:51 PM : Outperform Start Price: $16.65 GGB Score: -138.10

Gerdau SA is a Brazil-based producer of long rolled steel. Gerdau operates steel mills that produce steel by direct iron-ore reduction in blast furnaces and in electric arc furnaces. In Brazil, it operates blast furnace steel mills, including its mill, Gerdau Acominas, an integrated steel mill located in Ouro Branco in the state of Minas Gerais. Its main customers are the industries and companies connected to the civil construction and the farming and livestock sectors. As of December 31, 2009, the Company had a total of 137 steel units globally, including distribution units, joint ventures and associated companies. The Company operates in Brazil, Argentina, Chile, Colombia, Guatemala, Mexico, Peru, Dominican Republic, Uruguay, Venezuela, the United States, Canada, Spain and India. Its subsidiaries include Gerdau GTL Spain SL, Gerdau Steel North America Inc, Gerdau Steel Inc and Axol SA, among others.

One of the more profitable companies in the Iron and Steel industry with a net margin of 3.78%. Revenue is increasing. 46.66% increase in earnings. Company has improved earnings per share by 46.7% in the most recent quarter compared to the same quarter a year ago. Stock price has surged by 177% and I see no reason why this should not continue.

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Member Avatar MyPhotoPipe (< 20) Submitted: 2/28/2010 3:04:29 PM : Underperform Start Price: $13.78 GGB Score: +146.80

World economy is bleak!

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Member Avatar Ellas77 (< 20) Submitted: 2/26/2010 11:24:51 PM : Outperform Start Price: $13.78 GGB Score: -146.80

Drastic drop, drastic rise.

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Member Avatar jtallenmd (99.54) Submitted: 12/30/2009 9:48:24 PM : Outperform Start Price: $15.81 GGB Score: -148.47

Personalized Pick of the Day

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Member Avatar spotpetes (< 20) Submitted: 12/11/2009 3:54:50 PM : Outperform Start Price: $16.02 GGB Score: -151.47

Major growth in Brazil...

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Member Avatar cavaliere11 (< 20) Submitted: 10/20/2009 12:48:09 PM : Outperform Start Price: $15.09 GGB Score: -153.32

This is a top notch company in a growing market. It has great profit margins. Plus, with the falling U.S. dollar, it is even sweeter.

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Member Avatar wallstreetweapon (< 20) Submitted: 7/15/2009 10:54:20 AM : Outperform Start Price: $9.34 GGB Score: -168.35

Strong balance sheet, emerging market and at this price, an absoloute bargain!

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Member Avatar Bojac3728 (< 20) Submitted: 6/5/2009 8:01:04 AM : Outperform Start Price: $10.84 GGB Score: -169.59

Good growth.

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