Donald Smith & CO. Inc. Makes New $70.66 Million Investment in Gerdau S.A. $GGB

Donald Smith & CO. Inc. purchased a new stake in Gerdau S.A. (NYSE:GGB) in the second quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The firm purchased 17,490,810 shares of the basic materials company’s stock, valued at approximately $70,663,000. Gerdau comprises approximately 1.3% of Donald Smith & CO. Inc.’s portfolio, making the stock its 29th biggest holding.

A number of other hedge funds and other institutional investors also recently modified their holdings of the company. Bank of America Corp DE increased its stake in shares of Gerdau by 11,393.6% during the 1st quarter. Bank of America Corp DE now owns 13,222,623 shares of the basic materials company’s stock worth $47,734,000 after purchasing an additional 13,107,580 shares during the last quarter. Renaissance Technologies LLC raised its holdings in shares of Gerdau by 76.1% in the 1st quarter. Renaissance Technologies LLC now owns 10,936,524 shares of the basic materials company’s stock valued at $39,481,000 after purchasing an additional 4,725,200 shares during the period. Assenagon Asset Management S.A. acquired a new stake in Gerdau in the 2nd quarter valued at about $16,291,000. Kapitalo Investimentos Ltda acquired a new stake in Gerdau in the 1st quarter valued at about $9,618,000. Finally, UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its holdings in Gerdau by 821.1% during the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 2,344,175 shares of the basic materials company’s stock worth $6,657,000 after purchasing an additional 2,089,675 shares during the period. Institutional investors own 1.49% of the company’s stock.

Analyst Upgrades and Downgrades

GGB has been the topic of a number of recent analyst reports. JPMorgan Chase & Co. boosted their price target on Gerdau from $5.50 to $6.00 and gave the stock an “overweight” rating in a research report on Thursday, June 25th. Bank of America downgraded Gerdau from a “buy” rating to a “neutral” rating and set a $5.10 target price for the company. in a research note on Thursday. UBS Group reissued a “buy” rating and set a $5.25 target price (up from $4.60) on shares of Gerdau in a report on Wednesday, April 29th. HSBC cut Gerdau from a “buy” rating to a “hold” rating in a research note on Thursday. Finally, Itau BBA Securities downgraded Gerdau from an “outperform” rating to a “market perform” rating in a report on Monday, August 10th. One equities research analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating and five have issued a Hold rating to the company’s stock. According to data from MarketBeat, the stock has an average rating of “Moderate Buy” and an average price target of $5.24.

Gerdau Trading Down 0.2%

Shares of Gerdau stock opened at $4.32 on Friday. The company has a debt-to-equity ratio of 0.26, a quick ratio of 1.30 and a current ratio of 2.87. The firm has a 50-day moving average of $4.57 and a 200-day moving average of $4.32. Gerdau S.A. has a 52-week low of $2.88 and a 52-week high of $5.18. The stock has a market cap of $8.64 billion, a PE ratio of 18.78 and a beta of 1.48.

Gerdau (NYSE:GGB) last released its quarterly earnings results on Tuesday, August 4th. The basic materials company reported $0.15 EPS for the quarter, hitting analysts’ consensus estimates of $0.15. Gerdau had a net margin of 3.37% and a return on equity of 7.97%. The business had revenue of $3.45 billion for the quarter, compared to analyst estimates of $3.41 billion. As a group, sell-side analysts forecast that Gerdau S.A. will post 0.53 EPS for the current year.

Gerdau Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Friday, September 18th. Shareholders of record on Friday, August 21st will be given a dividend of $0.0448 per share. This represents a $0.18 dividend on an annualized basis and a dividend yield of 4.2%. The ex-dividend date is Friday, August 21st. This is a boost from Gerdau’s previous quarterly dividend of $0.04. Gerdau’s dividend payout ratio (DPR) is currently 52.17%.

Insider Activity

In other news, insider Marcos Zilles Mattiello sold 10,387 shares of the firm’s stock in a transaction that occurred on Monday, June 8th. The shares were sold at an average price of $5.11, for a total transaction of $53,077.57. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, EVP Mauricio Metz sold 7,000 shares of Gerdau stock in a transaction that occurred on Tuesday, June 2nd. The shares were sold at an average price of $4.85, for a total transaction of $33,950.00. Following the completion of the sale, the executive vice president owned 22,536 shares of the company’s stock, valued at approximately $109,299.60. The trade was a 23.70% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders have sold 63,322 shares of company stock worth $300,426. Insiders own 0.02% of the company’s stock.

Gerdau Profile

Gerdau SA is a Brazilian-based steel producer engaged in the manufacture and distribution of long steel products for the construction, industrial and agricultural sectors. Established in 1901, the company operates an integrated network of electric-arc furnaces and rolling mills, producing reinforcement bars, wire rod, merchant bars and structural shapes. Gerdau’s product portfolio also includes specialty long steel, high-yield reinforcement, rail, beams and steel coils, as well as value-added processing services such as cutting, bending and coating.

The company has expanded its footprint beyond Brazil, with significant operations in North America, South America and a presence in select European markets.