Time New York: Fri 14 Dec 10:41 am  |  Save 15% on H&R Block Online


Reliance Steel Hits New 52-Week High: What’s Driving It?


Shares of Reliance Steel & Aluminum Co. RS scaled a fresh 52-week high of $89.25 on Jan 5, before eventually closing the day at $88.45.

The company has a market cap of roughly $6.4 billion. Average volume of shares traded in the last three months is around 431K.

Reliance Steel’s shares have moved up 17.8% in the last three months, outperforming the industry’s 15.8% growth.

Driving Factors

Reliance Steel is gaining from its broad and diversified product base, wide geographic footprint and continued demand strength across aerospace and automotive markets and synergies of acquisitions.

Reliance Steel continues with its aggressive acquisition strategy to tap growth opportunities. The addition of Metals USA to the company’s portfolio has complemented its existing customer base, product mix and geographic footprint.

The company is witnessing strong demand for its products across aerospace and automotive markets. Demand in the aerospace market has been supported by higher commercial aerospace build rates. Strong demand is also witnessed in the automotive market, backed by the company’s toll processing businesses in the United States and Mexico as well as increased use of aluminum in the industry. Reliance Steel expects sustained momentum across these markets.

However, Reliance Steel expects to witness some pricing and volume pressure in the fourth quarter. The company, in its third-quarter call, noted that it expects tons sold will be down 4-6% in the fourth quarter on a sequential comparison basis. Average selling prices are also projected to be flat to down 2% in the fourth quarter compared with the third quarter.

Reliance Steel & Aluminum Co. Price and Consensus

Reliance Steel & Aluminum Co. Price and Consensus | Reliance Steel & Aluminum Co. Quote

Zacks Rank & Stocks to Consider

Reliance Steel currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space include are Huntsman Corporation HUN, Daqo New Energy Corp. DQ and Kronos Worldwide Inc. KRO, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Huntsman has an expected long-term earnings growth rate of 8%. Its shares have soared 80.7% over a year.

Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have rallied a whopping 214.3% over a year.

Kronos Worldwide has an expected long-term earnings growth rate of 5%. Its shares have surged 112.4% in the last year.

5 Medical Stocks to Buy Now

Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.

New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.

Click here to see the 5 stocks >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.