Investors Underestimating Ryerson’s Potential?
December 11, 2023
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Ryerson Holding ($NYSE:RYI) Corporation is an American metal processor and distributor of industrial products headquartered in Chicago, Illinois. It is one of the largest steel service centers in North America, with a wide range of products including carbon and stainless steel, aluminum, and specialty metals. With its wide range of offerings, Ryerson is a popular choice for many industrial companies seeking cost-effective and reliable metal products. Amidst the current market volatility, investors are questioning whether Ryerson Holding Corporation is being undervalued. Despite the company’s solid fundamentals and strong balance sheet, its stock price has been lagging behind the broader market indices. Analysts believe that the recent pullback in Ryerson’s stock price is due to investor concerns about potential risks resulting from the global pandemic.
However, many investors are overlooking the potential of the company’s diverse product offerings and its ability to attract customers from a wide range of industries. Ryerson’s versatile portfolio has enabled it to remain profitable even during difficult times, making it an attractive long-term investment opportunity. Furthermore, the company has also continued to increase its dividend payout over the past few quarters, providing investors with both income and capital appreciation potential. Given its robust fundamentals, it may be an opportune time for investors to take a closer look at Ryerson Holding Corporation and consider adding it to their portfolios. Despite the risks posed by the pandemic, investors should not underestimate the potential of this company in the long-term.
Share Price
Friday proved to be an optimistic day for Ryerson Holding‘s stock with the stock opening at $29.8 and closing at $30.1, an increase of 1.3% from the prior closing price of $29.7. This positive performance is indicative of investors’ renewed confidence in the company’s potential for future growth. Given the current state of the market, coupled with the various initiatives taken by the company in recent times, many analysts are of the opinion that Ryerson Holding’s stock is being undervalued and investors may be underestimating its potential. In addition to its core business activities, Ryerson Holding has been actively pursuing strategic acquisitions and partnerships to expand its portfolio and broaden its reach. The company has also taken steps to increase its presence in new markets to diversify its portfolio and expand its product offering.
All these initiatives have positioned Ryerson Holding for long-term growth and profitability. The increase in Ryerson Holding’s stock value Friday signals that investors are beginning to recognize the company’s potential and are likely to invest more in the company in the coming months. With a strong portfolio of products and services, solid financials and strong leadership, Ryerson Holding is well positioned to capitalize on future growth opportunities. It remains to be seen whether investors will take note of Ryerson Holding’s potential and invest accordingly. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Ryerson Holding. More…
| Total Revenues | Net Income | Net Margin |
| 5.28k | 95.8 | 1.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Ryerson Holding. More…
| Operations | Investing | Financing |
| 456.6 | -216.1 | -253.8 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Ryerson Holding. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 2.43k | 1.54k | 25.83 |
Key Ratios Snapshot
Some of the financial key ratios for Ryerson Holding are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 13.9% | 16.5% | 3.0% |
| FCF Margin | ROE | ROA |
| 6.2% | 11.3% | 4.0% |
Analysis
GoodWhale has conducted an analysis of RYERSON HOLDING‘s fundamentals and found that, on the Star Chart, RYERSON HOLDING has a high health score of 8/10. This score is based on its cashflows and debt, and indicates that the company is capable of sustaining future operations in times of crisis. We placed RYERSON HOLDING in the ‘rhino’ category, which means it has achieved moderate revenue or earnings growth. We believe investors who are interested in investing in companies with a strong balance sheet and moderate growth potential might be interested in RYERSON HOLDING. Furthermore, the company also scores highly in terms of asset quality, dividends, growth, and profitability. All these factors add up to make RYERSON HOLDING an attractive investment option. More…
Peers
Ryerson Holding Corp is one of the largest steel service center companies in North America. The company offers a broad range of value-added processing and inventory management services. Ryerson has over 100 locations in the United States and Canada, and employs approximately 8,000 people. The company’s competitors include Manaksia Coated Metals & Industries Ltd, Russel Metals Inc, and Ampco-Pittsburgh Corp. These companies are all large steel service center companies that offer a variety of value-added processing and inventory management services.
– Manaksia Coated Metals & Industries Ltd ($BSE:539046)
Manaksia Coated Metals & Industries Ltd (MCMIL) is engaged in the business of manufacturing and marketing of pre-painted steel sheets, steel pipes and tubes, and other steel products. The company has a market cap of 1.16B as of 2022 and a return on equity of 16.86%.
MCMIL is a leading manufacturer of pre-painted steel sheets in India. The company offers a wide range of products including pre-painted galvanized steel sheets, color coated steel sheets, and aluminum zinc coated steel sheets. MCMIL also manufactures steel pipes and tubes, and other steel products. The company has a well-established sales and distribution network in India and abroad.
– Russel Metals Inc ($TSX:RUS)
Russell Metals Inc is a leading North American metals distributor focused on the industrial metals sector. The company provides a broad range of products and services to customers in a variety of industries, including metals service centers, energy, transportation, construction, and manufacturing. Russell Metals is a publicly traded company with a market cap of 1.83B as of 2022. The company’s Return on Equity (ROE) is 28.83%.
– Ampco-Pittsburgh Corp ($NYSE:AP)
Ampco-Pittsburgh Corporation is engaged in the design, manufacture and sale of engineered forgings and castings, brakes, aerospace and other metal products, and metal powder. The Company operates through three segments: the Forged and Cast Engineered Products Segment, the Fluid Power Segment and the Brake and Friction Segment. The Forged and Cast Engineered Products Segment includes forgings, castings, fabricated metal assemblies, machined components and metal powder products. The Fluid Power Segment includes hydraulic pumps, power cylinders and hand pumps. The Brake and Friction Segment provides friction materials and related products for the transportation industry. Its products are used in a range of applications, including construction, mining, energy, transportation, marine and general industrial.
Summary
Investors may be undervaluing Ryerson Holding right now, as the company has experienced strong financial performance in recent years. Additionally, Ryerson boasts a healthy balance sheet, with cash and short-term investments surpassing total debt and current liabilities. With this solid financial performance and overall favorable outlook, investors should consider whether they are missing out on a potentially lucrative investment opportunity.
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