Russel Metals : Biggest metals distributors in North America.
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06/07/2012 | 12:21pm
Opinion : Bullish above 23.4 CAD
Target price : 28 CAD Potential: 2.46%
Stop loss: 22.3 CAD
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TORONTO STOCK EXCHANGE
Steel |
Russel Metals is one of the main metal distributor in Canada and United States. They operate under various banners in three activities: Metals service centers, energy tubular products and steel distributors.
From fundamental viewpoint, the company shows a strong health with an expected turnover growth about 9% for 2012 at CAD 2.93 billion against 2.7 billion for 2011. Net result was negative in 2009 but the company made significant efforts and could be pride to expect a CAD 124 million result for the ongoing fiscal exercise. Revisions are bullish for revenue and EPS and analysts fixed an average target price at CAD 28.1.
Technically the stock recorded a decline during the last month of 15%. A new bullish impulse seems to be taking place on CAD 24.2 short-term support. CAD 24.11 weekly support is crossing by 50-days moving average, confirming the relevance of this level. A bullish trend could push the stock on the way to its CAD 28 level.
Investors could take a buy position on Russel Metals with a first target at CAD 25.8, on the ongoing short-term resistance and by extension on the CAD 27.9 resistance. A stop loss will avoid disappointment below support at CAD 23.4.
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Valuation |
2013e |
2014e |
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PER (Price / EPS)
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14,7x |
11,4x |
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Capitalization / Revenue
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0,48x |
0,44x |
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EV / Revenue
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0,56x |
0,48x |
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EV / EBITDA
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7,98x |
6,36x |
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Yield (DPS / Price)
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5,45% |
5,45% |
| Profitability |
2013e |
2014e |
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Operating Margin (EBIT / Sales)
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5,84% |
6,39% |
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operating laverage (Delta EBIT / Delta Sales)
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0,94x |
2,19x |
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Net Margin (Net Profit / Revenue)
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3,24% |
3,79% |
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ROA (Net Profit / Asset)
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12,3% |
12,9% |
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ROE (Net Profit / Equities)
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13,3% |
16,1% |
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Rate of Dividend
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80,0% |
62,1% |
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