Reliance Steel & Aluminum (NYSE:RS)

Great managers who grow the business through timely acquisitions.

Margins will be under incredible pressure with the ongoing industrial contraction and global overcapacity.

S&P 5 star, 1.4% dividend

Intrinsic:$28.63

Getting Cheaper by the month, value play and banking on growth story to be back on track in the 3rd or 4th Qtr. Pays a small, divi, been paying for the past 51 years. Target price early 60s.

With only 33% D/E ratio, volume has been accumulating. However, at only 11% price above its 50-day moving average, there remains plenty of room to run back up to more normal valuations for a quality company.

RS has not been as affected by the recession as other steel companies like US Steel. With a strong exposure to asia expect them to grow sooner rather than later.

Parr says BUY

The business has consistently performed for the last 10 years, discounting the Democrat market crash. The company has a narrow moat, and has growth rates in sales, EPS, BVPS, FCF and ROIC greater than 10% for the last 10 years. (looking at 10, 5, 3 & 1 year data). Not to mention the steady performance over the last 6 months.

Another Motley Fool article selection chosen by the students. Steel companies have gotten their butts kicked, but everyone will need steel again eventually. One of my students did a fine job analyzing this company, and added that from his family's experience (his father is a steel company executive), this is the best run company in the business.

Upgraded to buy

I used to be employed by this company at one of it's subsidiaries, and considering the recent economy of the market, and their industry, coupled with the poor acquisitions of companies too close to currently owned companies, they are headed for distaster. Because the competition starts being within three companies owned by Reliance. All they are doing is cutting their own margins, and they refuse to subsidize their current companies to decrease the competitive nature in which the steel industry operates in. For instance, they own 3 companies (Phoenix Metals, Chatham Steel, and Infra-Metals) all which supply the entire state with hot rolled / carbon steel. Eventually they will run each company out of business.

The Industry leader in metals distribution. Well diversified product mix and geographic coverage. Strong, proven leadership.

score = 80

Steel is in high demand.

Commodities are back

I work for this company and the stock continues to make money. Reliance has purchased many regional players in the market and incorporated them under a more efficient umbrella of distribution. There will be some volatility with this stock as the demand for steel here in US has dropped over the past month or so.. However,, its strong management and low margins should continue to make this stock a great investment over the long term.

1/7/08 1year price target $ 84

CAPS is now my place to test stocks for my newsletter.

I like investing in good companies that fit into a macro economic/societal trend I see currently occuring or coming.

So on the macro level I think steel and other metals still have room to run.

On the specific company I like the following information about the company: "One of the Company's subsidiaries has an international location in South Korea that serves the Asian semiconductor markets. Another subsidiary opened a metals service center in Belgium in January 2003 to service the European aerospace market. On March 1, 2006, the Company 70%- owned joint venture company, based in Singapore, acquired a metals service center company in China that mainly serves the electronics industry in China."