RS Stock Intrinsic Value – Reliance Steel & Aluminum Strengthens Footprint in Tennessee with Acquisition of Southern Steel Supply
May 3, 2023
Trending News ☀️
Reliance Steel & Aluminum ($NYSE:RS) has further strengthened its footprint in the state of Tennessee with the acquisition of Southern Steel Supply. Reliance Steel & Aluminum Co. is a leading provider of metals and services to the industrial, infrastructure and energy markets. Southern Steel Supply is a full-service metal center offering steel, aluminum, stainless steel, red metals, and other specialty metals, as well as cutting and fabricating services.
Price History
This acquisition expands RS&A’s presence in the southeast United States and further strengthens their foothold in the Southeast market. The acquisition solidifies RS&A’s position as a leading supplier of steel products and services in the Southeast, with a strong presence in both Tennessee and the surrounding states. With the addition of Southern Steel Supply, RS&A now has six locations in the Southeast, allowing them to better serve their customers across the region. In response to the news, shares of RS&A opened at $249.1 on Monday and closed at $246.2 by the end of trading, down 0.7% from last closing price of $247.8.
However, RS&A remains confident that the acquisition will lead to long-term success and expand their customer base in the Southeast region. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for RS. More…
| Total Revenues | Net Income | Net Margin |
| 16.5k | 1.7k | 9.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for RS. More…
| Operations | Investing | Financing |
| 2.1k | -387.8 | -1.44k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for RS. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 10.2k | 2.85k | 124.84 |
Key Ratios Snapshot
Some of the financial key ratios for RS are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 15.9% | 35.4% | 14.5% |
| FCF Margin | ROE | ROA |
| 10.4% | 20.7% | 14.6% |
Analysis – RS Stock Intrinsic Value
At GoodWhale, we have conducted an analysis on the fundamentals of RELIANCE STEEL & ALUMINUM to determine its intrinsic value. After careful consideration of the company’s financial performance and position, our proprietary Valuation Line has calculated the intrinsic value of RELIANCE STEEL & ALUMINUM share to be around $219.5. Currently, RELIANCE STEEL & ALUMINUM stock is traded at $246.2, which is a fair price that is overvalued by 12.1%. This means that the shareholders of RELIANCE STEEL & ALUMINUM are paying more for their share and getting a lesser return on their investment than what they could otherwise be getting. We recommend that the shareholders of RELIANCE STEEL & ALUMINUM review the intrinsic value of their shares and consider taking action if it does not meet their expectations. More…
Peers
Reliance Steel & Aluminum Co., Universal Stainless & Alloy Products Inc., Jiangsu Shagang Co Ltd, and Xinjiang Ba Yi Iron & Steel Co Ltd are all steel and aluminum companies. They all have their own unique offerings, but they compete with each other in the market.
– Universal Stainless & Alloy Products Inc ($NASDAQ:USAP)
Universal Stainless & Alloy Products Inc is a company that manufactures and sells stainless steel and nickel alloy mill products. The company has a market cap of 65.99M as of 2022 and a Return on Equity of -1.12%. Universal Stainless & Alloy Products Inc is a publicly traded company on the NASDAQ Stock Market under the ticker symbol “USAP”.
– Jiangsu Shagang Co Ltd ($SZSE:002075)
Jiangsu Shagang Co., Ltd. is a Chinese state-owned steel producer. The company is based in Zhangjiagang, Jiangsu Province, and is listed on the Shanghai Stock Exchange. Jiangsu Shagang is one of the largest private steel companies in China, with an annual output of over 20 million tons of steel. The company produces a wide range of steel products, including hot and cold rolled coils, galvanized sheets, and stainless steel products. In addition to its steel operations, Jiangsu Shagang also has businesses in coal mining, power generation, and real estate development.
– Xinjiang Ba Yi Iron & Steel Co Ltd ($SHSE:600581)
Xinjiang Ba Yi Iron & Steel Co Ltd has a market cap of 5.58B as of 2022, a Return on Equity of -24.16%. The company is engaged in the production and sale of iron and steel products. It is one of the largest iron and steel companies in China. The company’s products are used in a variety of industries, including construction, automotive, machinery manufacturing, and shipbuilding.
Summary
Reliance Steel & Aluminum Co. (RS&A) has announced the acquisition of Southern Steel Supply in Tennessee. This strategic move expands RS&A’s presence in the Southeast region and boosts its metal processing capabilities. The purchase price was not disclosed, but the company expects to benefit from increased operational efficiencies and improved customer service. RS&A has a strong history of successful acquisitions, and this is likely to be no exception.
With the addition of Southern Steel Supply, RS&A will be able to better serve its customers with a broader product range and faster delivery times. Investing in RS&A could be a smart move for those looking for a reliable and growing metal distribution company.
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