Gerdau (NYSE:GGB) Shares Break Below 200 Day Moving Average Following Analyst Downgrade

Gerdau S.A. (NYSE:GGB) shares crossed below its two hundred day moving average during trading on Thursday after Scotiabank downgraded the stock from a strong-buy rating to a hold rating. The stock has a two hundred day moving average of $4.47 and traded as low as $4.33. Gerdau shares last traded at $4.3850, with a volume of 27,310,692 shares traded.

GGB has been the topic of several other reports. HSBC cut shares of Gerdau from a “buy” rating to a “hold” rating in a research report on Thursday, August 20th. JPMorgan Chase & Co. lifted their price objective on shares of Gerdau from $6.00 to $6.50 and gave the company an “overweight” rating in a research report on Friday, September 4th. Bank of America cut Gerdau from a “buy” rating to a “neutral” rating and set a $5.10 price target on the stock. in a research note on Thursday, August 20th. Itau BBA Securities upgraded shares of Gerdau from a “market perform” rating to an “outperform” rating in a research report on Wednesday, October 28th. Finally, Weiss Ratings raised shares of Gerdau from a “hold (c+)” rating to a “buy (b-)” rating in a research report on Monday, October 12th. Four research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the stock. According to MarketBeat, Gerdau has a consensus rating of “Hold” and an average target price of $5.65.

Insiders Place Their Bets

In related news, Chairman Claudio Johannpeter sold 85,607 shares of the company’s stock in a transaction dated Wednesday, September 23rd. The shares were sold at an average price of $4.94, for a total transaction of $422,898.58. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this link. Also, EVP Rafael Lopes sold 51,800 shares of the company’s stock in a transaction dated Thursday, September 17th. The stock was sold at an average price of $5.09, for a total transaction of $263,662.00. Following the sale, the executive vice president directly owned 83,399 shares of the company’s stock, valued at $424,500.91. This represents a 38.31% decrease in their position. The SEC filing for this sale provides additional information. 0.02% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Gerdau

Hedge funds and other institutional investors have recently made changes to their positions in the company. R Squared Ltd increased its stake in Gerdau by 60.1% in the third quarter. R Squared Ltd now owns 31,255 shares of the basic materials company’s stock valued at $148,000 after acquiring an additional 11,735 shares during the last quarter. Jefferies Financial Group Inc. bought a new stake in Gerdau during the third quarter worth $249,000. Allspring Global Investments Holdings LLC lifted its stake in Gerdau by 33.4% during the third quarter. Allspring Global Investments Holdings LLC now owns 19,891 shares of the basic materials company’s stock worth $97,000 after purchasing an additional 4,977 shares during the last quarter. Commonwealth Equity Services LLC lifted its stake in Gerdau by 1.7% during the third quarter. Commonwealth Equity Services LLC now owns 280,159 shares of the basic materials company’s stock worth $1,322,000 after purchasing an additional 4,626 shares during the last quarter. Finally, Mirae Asset Global Investments Co. Ltd. acquired a new stake in shares of Gerdau in the 3rd quarter valued at $94,000. 1.49% of the stock is currently owned by institutional investors and hedge funds.

Gerdau Stock Performance

The stock has a fifty day simple moving average of $4.91 and a two-hundred day simple moving average of $4.47. The stock has a market cap of $8.61 billion, a price-to-earnings ratio of 15.66 and a beta of 1.55. The company has a debt-to-equity ratio of 0.26, a quick ratio of 1.30 and a current ratio of 2.87.

Gerdau (NYSE:GGB) last posted its quarterly earnings results on Monday, October 26th. The basic materials company reported $0.15 EPS for the quarter, missing analysts’ consensus estimates of $0.18 by ($0.03). Gerdau had a return on equity of 8.90% and a net margin of 4.06%. The business had revenue of $3.61 billion for the quarter, compared to analyst estimates of $3.64 billion. Analysts expect that Gerdau S.A. will post 0.55 EPS for the current fiscal year.

Gerdau Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 22nd. Investors of record on Thursday, November 12th will be issued a dividend of $0.0637 per share. This is a positive change from Gerdau’s previous quarterly dividend of $0.0448. The ex-dividend date of this dividend is Thursday, November 12th. This represents a $0.25 annualized dividend and a dividend yield of 5.8%. Gerdau’s dividend payout ratio (DPR) is 53.57%.

About Gerdau

Gerdau SA is a Brazil-based steel producer with operations across the Americas. The company manufactures and sells steel products for the construction, industrial, automotive, agricultural and infrastructure markets.

Its product portfolio includes long steel products such as rebar, wire rod, merchant bars and structural shapes, as well as special steel used in automotive and industrial applications. Gerdau also produces flat steel and semi-finished products, including billets and slabs, and operates steel mills, scrap-processing facilities and related distribution networks.

Founded in 1901, Gerdau has grown from a regional Brazilian steelmaker into an international producer serving customers in Brazil, North America and other parts of Latin America.