This is our first report on Reliance Steel & Aluminum Co, a large steelmaker known to sell over 100,000 metal products and offering value-added services for processing metals. Some of their products are alloy steel, stainless steel, hot-rolled and cold-finished steel, galvanized steel, brass, copper, titanium, and aluminium. The resilient business model, strong execution combined with pricing trends of favorable metal were beneficial to produce a positive set of financial results for the company. Despite the macroeconomic challenges, the company’s performance was supported by its positive underlying trends, which include continued strong demand and improvement of shipment levels in every month of the quarter. This quarter’s results also benefitted from the company’s robust ongoing support from its domestic suppliers and its valued relationships with its loyal customers. Reliance also completed two successful acquisitions, one with Admiral Metals and the other with Rotax Metals in recent times. The improved earnings power resulted in generating the highest cash flow. The noteworthy cash generation is fueled by the company’s capital allocation strategy that is focused on both stockholders’ returns and growth. The company’s capital expenditure budget is increased to $455 million for capturing the emerging opportunities that support the semiconductor industry in the U.S. We provide the company with a ‘Hold’ rating.
Our Report Structure:
⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
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