Key Points Kawa Capital sold 2,094,404 shares of Gerdau S.A. in the fourth quarter. The transaction represented a 15.0% change in reported 13F AUM. The shares were previously worth about $6.49 million. These 10 stocks could mint the next wave of millionaires › Kawa Capital Management sold out its entire position in Gerdau S.A. (NYSE:GGB), according to a January 21 SEC filing, with an estimated transaction value of $6.49 million based on the last-disclosed value. What happened According to a fi ...

Core Insights - The article emphasizes the importance of looking beyond U.S. large caps for investment opportunities, particularly in undervalued international stocks [1][3][9] - The Benzinga Value Ranking is introduced as a systematic, numbers-driven tool to identify the cheapest stocks globally based on multiple valuation metrics [2][5] Investment Strategy - Investors are encouraged to focus on the top decile of the Benzinga Value Ranking, specifically targeting non-U.S. stocks to access the cheapest part of the global market [7][9] - The current market environment is characterized by extreme valuation dispersion outside the U.S., with many profitable companies trading at low earnings multiples [4][6] Company Highlights - **POSCO Holdings (NYSE:PKX)**: A leading steel producer in South Korea, trading at discounted multiples despite controlling high-quality assets [11] - **Sasol Ltd. (NYSE:SSL)**: An integrated energy and chemicals company in South Africa, generating substantial cash flow but heavily discounted due to past operational issues [12] - **Korea Electric Power Corp. (NYSE:KEP)**: The backbone of South Korea's power system, facing extreme low valuation multiples due to government pricing controls [13] - **LuxExperience (NYSE:LUXE)**: A niche luxury travel company in the Netherlands, undervalued due to lack of investor attention rather than demand collapse [14] - **Gerdau (NYSE:GGB)**: Brazil's largest long steel producer, trading at low multiples despite consistent cash flow generation [15] - **Honda Motor (NYSE:HMC)**: A global manufacturing leader in Japan, undervalued due to lack of hype around its steady profits and cash flow [16] - **SK Telecom (NYSE:SKM)**: South Korea's largest wireless carrier, undervalued due to low growth expectations despite reliable cash generation [18] - **Jiayin Group (NASDAQ:JFIN)**: A Chinese fintech company facing regulatory uncertainty, leading to extreme valuation discounts [19] - **FinVolution Group (NYSE:FINV)**: Another Chinese fintech platform, similarly undervalued due to regulatory challenges and investor distrust [20] - **KT Corp. (NYSE:KT)**: A leading telecommunications provider in South Korea, generating stable cash flow but facing compressed valuation multiples [21]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Market Overview - Despite markets hovering near all-time highs, there is a shift from exuberance to cautious optimism, influenced by weak U.S. employment numbers and the potential economic impact of a federal government shutdown [1] - The market has not seen a 10% correction in over six months, leading investors to brace for a potential drawdown instead of a year-end rally [2] Value Stocks - Investors sitting on significant unrealized gains may consider reallocating to value stocks to minimize losses and generate income through dividends [2] - Five value stocks with a market cap of $3 billion or higher and a Benzinga Edge Value score of at least 90 are highlighted for portfolio protection in volatile environments [3] Sasol Ltd. - Sasol Ltd. has a Benzinga Edge Value Score of 99.66, with a market cap of $3.94 billion, trading at 10 times earnings, a P/B value of 0.4, and a P/S ratio of 0.27, indicating it is undervalued compared to U.S. and emerging market peers [4] - The stock has shown volatility but has evidence of upward momentum, with key technical levels to watch for a potential breakout [6] Gerdau SA - Gerdau has a Benzinga Edge Value Score of 97.67, with a market cap of $7 billion, trading at 8 times forward earnings, a P/B value of 0.70, and a P/S ratio of 0.37, along with a 3.27% dividend [7] - The stock has been trending higher since a Golden Cross in August, currently over 10% above its 50-day SMA, indicating bullish momentum [9] Ecopetrol SA - Ecopetrol has a Benzinga Edge Value Score of 97.47, with a market cap of $19 billion and annual sales exceeding $30 billion, showing a nearly 20% increase year-to-date [10] - The stock's fundamentals and technical trends are favorable, with a P/E ratio of 6.55 and a P/S ratio of 0.64, and bullish momentum is building [12] Seaboard Corp. - Seaboard has a Benzinga Edge Value Score of 94.03, with a market cap of $3.5 billion and annual sales over $9 billion, trading at 9 times earnings, a P/S ratio of 0.36, and a P/B ratio of 0.71 [13] - Recent signals indicate a revival in bullish momentum, with a significant rally taking the share price above the 50-day SMA [15] Fluor Corp. - Fluor has a Benzinga Edge Value Score of 91.46, with a market cap of $7 billion and annual sales exceeding $16 billion, trading at just 2 times earnings and a P/S ratio of 0.47 [16] - The stock has seen a 15% increase in the last three months, breaking above its 50- and 200-day SMAs, indicating a potential momentum reversal [18]

Financial Data and Key Metrics Changes - The company reported an EBITDA of BRL 2.7 billion for Q3 2025, which is a 7% increase quarter on quarter [6] - Free cash flow generated during the quarter was BRL 1 billion, converting 37% of EBITDA into cash, reversing previous cash consumption trends [7] - The net debt/EBITDA ratio improved to 0.81 times due to cash generation in Q3 [7] - Capital expenditures totaled BRL 1.7 billion, with a 22% reduction in CapEx guidance for 2026 compared to 2025 [8] Business Line Data and Key Metrics Changes - North America segment accounted for 65% of consolidated EBITDA, with over a 10% increase in total shipments compared to previous periods [4][5] - The South American segment showed recovery, which offset declines in Brazil, where the local market was heavily impacted by imported steel [6] Market Data and Key Metrics Changes - In North America, steel demand remains stable with healthy order backlogs, while Brazil's market is affected by over 6 million tons of imported steel, representing 29% of domestic sales [5][10] - The import penetration rate in Brazil continues to be a concern, necessitating protective measures for the local steel industry [5] Company Strategy and Development Direction - The company emphasizes internationalization and geographic diversification as strategic differentiators [5] - The sustainable mining project in Miguel Burnier is nearing completion, with operations expected to start in early 2026 [5] - The company is focusing on internal operating efficiency and cost management initiatives in response to market challenges [11] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook for North American steel demand driven by sectors like solar power and infrastructure, while the Brazilian market outlook remains uncertain [10][11] - There is cautious optimism regarding trade defense measures being adopted by the Brazilian government [11] - The company plans to enhance competitiveness through operational adjustments and potential consolidation of production routes if necessary [46][48] Other Important Information - The company approved a dividend distribution of BRL 0.28 per share at Gerdau S.A. and BRL 0.19 per share at Metallurgica Gerdau [8] - Share buybacks have reached 88% of the 2025 program, returning BRL 902 million to shareholders [9] Q&A Session Summary Question: What strategies are needed to improve the challenging scenario in Brazil? - Management indicated that further competitiveness measures have been exhausted, and trade defense is crucial for survival [28][30] Question: What is the outlook for U.S. prices and market dynamics? - Management noted that the metal spread has reached a level with limited room for further increases, and demand remains strong [33][34] Question: What is the impact of anti-dumping measures in the U.S.? - Management is monitoring the situation, noting that while rebar accounts for a small portion of the product mix, it could affect competition dynamics [41][42] Question: How will the company approach capital allocation in light of strong cash generation? - The focus will be on share buybacks over dividends, with a robust cash position allowing for strategic investments [43] Question: What are the implications of potential tariff renegotiations with Canada and Mexico? - Management believes that any agreements would optimize operations and sales across borders, enhancing profitability [80]

Financial Performance - Adjusted EBITDA reached R$27 billion[12] - Net income grew to R$11 billion, a 26% increase compared to 2Q25[12] - Free cash flow was R$10 billion, primarily due to higher working capital release[12] - Dividends declared for Gerdau S A were approximately R$555 million (R$028/share) and for Metalúrgica S A were approximately R$188 million (R$019/share)[12] - Share buyback program executed 88%, with approximately R$902 million invested, representing 29% of outstanding shares[12] Operational Highlights - Steel shipments reached 30 million tonnes, with YoY growth, including a 10% increase in North America[5] - North America achieved its highest-ever share in consolidated EBITDA at 65%, compared to 61% in 2Q25[8] - The Miguel Burnier Mining project is 90% complete and in the pre-operational phase, with start-up expected in 4Q25[10] Market Dynamics - Steel import penetration in Brazil remains high at 25% for the first nine months of the year[6] - CAPEX guidance for 2026 is R$47 billion, a 22% decrease compared to the 2025 estimate[12]

Financial Performance - Net sales for Q3 2025 reached R$17,983,143, a 3.5% increase from R$17,378,032 in Q3 2024[4] - Net income for Q3 2025 was R$1,089,880, a decrease of 19.7% compared to R$1,356,245 in Q3 2024[5] - Gross profit for the nine-month period ended September 30, 2025, was R$6,119,192, down 14.8% from R$7,183,230 in the same period of 2024[4] - Comprehensive income for the nine-month period ended September 30, 2025, was a loss of R$1,810,061, compared to a gain of R$7,569,992 in the same period of 2024[5] - Net income for the nine-month period ended September 30, 2025, was R$2,712,181, a decrease of 36.7% compared to R$4,276,098 for the same period in 2024[7] - The Adjusted EBITDA for the three-month period ended September 30, 2025, was R$2,736,858, down from R$3,015,962 in the same period of 2024, indicating a decrease of about 9.2%[173] - The total financial expenses for the nine-month period ended September 30, 2025, were R$1,429,577, compared to R$1,074,408 for the same period in 2024, reflecting an increase of approximately 33%[171] Assets and Liabilities - Total assets as of September 30, 2025, amounted to R$87,255,733, slightly up from R$86,814,493 at the end of 2024[3] - Current liabilities increased to R$12,353,460 as of September 30, 2025, from R$10,851,391 at the end of 2024, reflecting a rise of 13.8%[3] - Long-term debt rose to R$10,966,428 as of September 30, 2025, up from R$9,110,972 at the end of 2024, indicating an increase of 20.3%[3] - The company’s equity attributable to the equity holders of the parent decreased to R$54,539,163 from R$57,948,759 at the end of 2024, a decline of 5.5%[3] - Total financing increased to R$14,069,338 as of September 30, 2025, compared to R$9,808,021 as of December 31, 2024, reflecting a rise of 43.3%[63] Cash Flow and Investments - Cash and cash equivalents increased to R$9,389,572 as of September 30, 2025, compared to R$7,767,813 at the end of 2024, representing a growth of 20.8%[2] - Cash provided by operating activities decreased to R$6,395,731, down 39.8% from R$10,538,576 in the previous year[7] - Net cash used in investing activities increased significantly to R$6,034,590, compared to R$2,610,224 in the prior year, reflecting higher capital expenditures[7] - The company made a payment for the acquisition of company control amounting to R$673,272 during the nine-month period[7] Segment Performance - The North America Segment reported net sales of R$27,091,832 for the nine-month period ended September 30, 2025, compared to R$24,395,817 in 2024, reflecting a growth of about 11.1%[179] - The Brazil Segment's net sales for the nine-month period were R$21,719,406, slightly down from R$21,760,539 in 2024, showing a marginal decline of about 0.2%[179] - The South America Segment's net sales for the nine-month period were R$4,072,991, slightly down from R$4,047,756 in 2024, indicating a marginal increase of about 0.6%[179] Shareholder Information - The company reported a balance of R$2,056,535 thousand in financing agreements due by October 2027[140] - The share buyback program resulted in the acquisition of 1,767,911 common shares and 61,156,300 preferred shares at average prices of R$17.78 and R$18.89 respectively[149] - The company credited dividends of R$0.12 per share for both the 1st and 2nd quarters of 2025, totaling R$480,383,000 proposed dividends[158] - The total number of common shares decreased to 718,066,519 as of September 30, 2025, from 719,956,830 at the end of 2024, reflecting a cancellation of treasury stocks[146] Tax and Legal Matters - The company has contingent liabilities related to tax claims totaling R$2,250,113 thousand as of September 30, 2025, up from R$2,137,038 thousand as of December 31, 2024[128] - Gerdau S.A. is involved in lawsuits related to Corporate Income Tax and Social Contribution on Net Income, with an updated amount of R$1,544,833 as of September 30, 2025, compared to R$1,486,615 on December 31, 2024[131] Market and Economic Conditions - Gerdau is monitoring the potential effects of increased U.S. tariffs on Brazilian exports, which could impact domestic steel consumption[23] - The Company will continuously monitor the steel market through 2025 to identify any significant drops in demand from key sectors such as automotive and construction[184]

Group 1 - The event is Gerdau's Investor Day, welcoming attendees and highlighting the presence of familiar faces [1] - The agenda includes a presentation by the CEO, followed by a discussion on CapEx and financial management by the CFO [2] - For the first time, Gerdau Brazil Officer will present, concluding with a presentation from the leader of North America operations [3]

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Gerdau Investor Day Summary Company Overview - **Company**: Gerdau (NYSE:GGB) - **Event**: 2025 Investor Day - **Date**: October 01, 2025 Key Points Industry Context - The steel industry is facing challenges from high levels of imports, particularly from China, which is perceived as unfair competition due to subsidies [12][13] - Brazil is experiencing a significant deficit in engineering talent, with a projection of a shortage of 1,000,000 engineers by 2030 [10] - The Brazilian steel market is currently dealing with record levels of steel imports, which have reached 6.3% of total consumption, impacting profitability [60] Financial Management and Capital Allocation - Gerdau announced a reduction in CapEx disbursement by 22% for 2026, totaling BRL 4.7 billion, with BRL 2.9 billion allocated for maintenance and BRL 1.8 billion for competitive edge [21][19] - The company has maintained a strong financial position with a net debt to EBITDA ratio of 1.5x, indicating low leverage and financial health [40] - Gerdau has consistently returned more than 30% of net income to shareholders, with 75% of free cash flow returned through dividends and share buybacks [42][43] Operational Highlights - Gerdau is focusing on three main projects for the next three years: expansion in Midlothian, Texas, a new recycling center in Pindamonhangaba, and investments in mining operations [22][24][66] - The mining project is expected to ramp up by early next year, with an investment of BRL 3.6 billion, providing a significant competitive advantage [66][72] - The company is also investing in self-generation of electricity to reduce costs, which currently account for 4% of production costs in Brazil [30][33] Market Trends and Demand - The Brazilian market is expected to see moderate growth aligned with GDP, with specific segments like civil construction showing resilience despite high-interest rates [53][54] - Demand for steel in the automotive sector remains strong, although there are concerns about the inflow of imports affecting growth [56][59] - Gerdau is adapting to tariffs imposed on steel imports, which have led to a decline in imports and increased domestic prices, benefiting profitability [86][90] Strategic Initiatives - Gerdau is implementing a vertical integration strategy to secure its supply chain, particularly in iron ore, which is crucial for maintaining competitive production costs [64][66] - The company is enhancing its product portfolio, particularly in flat steel, to cater to high-demand sectors like oil and gas [74] - Gerdau is focusing on optimizing its mini-mill operations to improve scrap recovery and reduce dependency on external ore sources [80][81] Conclusion - Gerdau is positioning itself to navigate the challenges in the steel industry through strategic investments, operational efficiencies, and a strong focus on financial discipline, while also addressing the need for talent development in Brazil [11][10][15]