Gerdau (NYSE:GGB) Share Price Breaks Below Two Hundred Day Moving Average Following Analyst Downgrade

Shares of Gerdau S.A. (NYSE:GGB) crossed below its 200-day moving average during trading on Thursday after Scotiabank downgraded the stock from a strong-buy rating to a hold rating. The stock has a 200-day moving average of $4.47 and traded as low as $4.33. Gerdau shares last traded at $4.3850, with a volume of 27,310,692 shares traded.

A number of other equities research analysts have also commented on GGB. Wall Street Zen lowered Gerdau from a “strong-buy” rating to a “buy” rating in a research report on Saturday, October 31st. UBS Group increased their price target on shares of Gerdau from $6.10 to $6.40 and gave the stock a “buy” rating in a report on Thursday, October 29th. HSBC lowered shares of Gerdau from a “buy” rating to a “hold” rating in a research report on Thursday, August 20th. JPMorgan Chase & Co. lifted their price objective on shares of Gerdau from $6.00 to $6.50 and gave the company an “overweight” rating in a research note on Friday, September 4th. Finally, The Goldman Sachs Group downgraded shares of Gerdau to a “neutral” rating in a report on Monday, August 24th. Four analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company. According to MarketBeat, the company presently has an average rating of “Hold” and an average target price of $5.65.

Insider Activity

In related news, Chairman Claudio Johannpeter sold 85,607 shares of the firm’s stock in a transaction dated Wednesday, September 23rd. The stock was sold at an average price of $4.94, for a total transaction of $422,898.58. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, EVP Rafael Lopes sold 51,800 shares of the firm’s stock in a transaction dated Thursday, September 17th. The stock was sold at an average price of $5.09, for a total value of $263,662.00. Following the sale, the executive vice president directly owned 83,399 shares in the company, valued at approximately $424,500.91. This trade represents a 38.31% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders own 0.02% of the company’s stock.

Institutional Investors Weigh In On Gerdau

Several hedge funds have recently bought and sold shares of GGB. Ninety One UK Ltd purchased a new position in shares of Gerdau during the 3rd quarter valued at approximately $145,390,000. Donald Smith & CO. Inc. purchased a new stake in Gerdau during the second quarter worth $70,663,000. Bank of America Corp DE boosted its holdings in Gerdau by 11,393.6% during the first quarter. Bank of America Corp DE now owns 13,222,623 shares of the basic materials company’s stock worth $47,734,000 after buying an additional 13,107,580 shares in the last quarter. Ninety One North America Inc. purchased a new stake in Gerdau during the third quarter worth $38,760,000. Finally, Renaissance Technologies LLC grew its position in Gerdau by 76.1% during the first quarter. Renaissance Technologies LLC now owns 10,936,524 shares of the basic materials company’s stock valued at $39,481,000 after buying an additional 4,725,200 shares during the period. Hedge funds and other institutional investors own 1.49% of the company’s stock.

Gerdau Trading Down 0.1%

The company has a market cap of $8.61 billion, a price-to-earnings ratio of 15.66 and a beta of 1.55. The company has a quick ratio of 1.30, a current ratio of 2.87 and a debt-to-equity ratio of 0.26. The company’s 50-day moving average is $4.91 and its 200 day moving average is $4.47.

Gerdau (NYSE:GGB) last issued its quarterly earnings data on Monday, October 26th. The basic materials company reported $0.15 earnings per share for the quarter, missing analysts’ consensus estimates of $0.18 by ($0.03). Gerdau had a return on equity of 8.90% and a net margin of 4.06%. The firm had revenue of $3.61 billion during the quarter, compared to analyst estimates of $3.64 billion. Research analysts predict that Gerdau S.A. will post 0.55 EPS for the current year.

Gerdau Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, December 22nd. Investors of record on Thursday, November 12th will be issued a $0.0637 dividend. This represents a $0.25 dividend on an annualized basis and a yield of 5.8%. The ex-dividend date of this dividend is Thursday, November 12th. This is a positive change from Gerdau’s previous quarterly dividend of $0.0448. Gerdau’s payout ratio is currently 53.57%.

About Gerdau

Gerdau SA is a Brazil-based steel producer with operations across the Americas. The company manufactures and sells steel products for the construction, industrial, automotive, agricultural and infrastructure markets.

Its product portfolio includes long steel products such as rebar, wire rod, merchant bars and structural shapes, as well as special steel used in automotive and industrial applications. Gerdau also produces flat steel and semi-finished products, including billets and slabs, and operates steel mills, scrap-processing facilities and related distribution networks.

Founded in 1901, Gerdau has grown from a regional Brazilian steelmaker into an international producer serving customers in Brazil, North America and other parts of Latin America.