Yahoo Finance Reliance Steel (RS) Reaches Agreement to Purchase Fry Steel
Reliance Steel & Aluminum Co. RS announced that it inked a deal to buy all of Fry Steel Company’s outstanding capital stock.
Notably, Fry Steel is a general line and long bar supplier situated in Santa Fe Springs, CA. It was founded in 1948 and family-owned for almost five decades. It provides next-day “in-stock” delivery via its proprietary fleet of trucks. Notably, the company developed a worldwide reputation for outstanding customer service.
Per Reliance Steel’s management, the acquisition fits within its strategy of purchasing high-margin specialty product-focused businesses, and supports its customer and product diversification strategy.
The transaction is slated to close in early 2020, subject to regulatory approval and customary closing conditions. The terms of the transactions were not revealed.
Reliance Steel’s shares have surged 63.8% in the past year compared with the industry’s 50.9% growth.
In October, the company mentioned that it is optimistic about business conditions in the fourth quarter of 2019. Excluding the impact of normal seasonal patterns, it expects end demand to stay relatively steady in the fourth quarter compared with the third quarter.
For the fourth quarter, Reliance Steel expects a 4-7% sequential decrease in total tons sold. Overall metal pricing is anticipated to remain near the current level, which is likely to result in a 2-3% sequential decline in its average selling price per ton sold.
Based on these expectations, the company projects adjusted earnings per share (EPS) of $1.60-$1.70 for the fourth quarter.
Reliance Steel & Aluminum Co. Price and Consensus
Reliance Steel & Aluminum Co. price-consensus-chart | Reliance Steel & Aluminum Co. Quote
Zacks Rank & Other Stocks to Consider
Reliance Steel currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the basic materials space are Impala Platinum Holdings Ltd. IMPUY, currently sporting a Zacks Rank #1, and Franco-Nevada Corporation FNV and General Moly, Inc GMO, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Impala Platinum Holdings has a projected earnings growth rate of 255.2% for 2019. The company’s shares have rallied 287.1% in a year.
Franco-Nevada has a projected earnings growth rate of 45.3% for 2019. The company’s shares have rallied 33.8% in a year.
General Moly has an estimated earnings growth rate of 12.5% for the current year. Its shares have moved up 27.2% in the past year.
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