Reliance, Inc.’s (RS) shares have gained 20.9% over the past three months. The company has also outperformed its industry’s rise of 15.2% over the same time frame. It has also topped the S&P 500’s roughly 11.6% rise over the same period.Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock. Image Source: Zacks Investment Research What’s Aiding RS?Forecast-topping earnings performance in the fourth quarter of 2023 and upbeat prospects have contributed to the gain in the company's ...

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Even ...

Core Viewpoint - Reliance Steel & Aluminum Co. has achieved all-time high share prices despite a decline in sales and earnings compared to an exceptionally strong 2022, indicating strong underlying business performance and resilience in a cyclical industry [2][4]. Company Overview - Reliance Steel is the largest metals service center in North America, operating over 300 locations across 40 states and 12 other countries, providing value-added metal services and distributing over 100,000 products [3]. - The company focuses on small orders averaging just over $3,000, catering to customers who cannot cost-effectively perform these services in-house, showcasing its niche market strength [3]. Current Financial Results - In 2023, revenues decreased by 13% to $14.8 billion, while tons sold increased by nearly 4% [4]. - Gross margins remained stable at approximately 30%, with adjusted operating profits down 28% to $1.74 billion and reported earnings down 27% to $1.34 billion [4]. - The final quarter of 2023 saw tons sold increase by 5%, with revenues down nearly 8% to $3.3 billion [5]. Financial Health and Shareholder Returns - The company reported a net debt of only $70 million at year-end, indicating a strong balance sheet [5]. - A quarterly dividend was increased by 10% to $1.10 per share, marking the 31st consecutive dividend increase since going public in 1994 [5]. - The company has provided a positive outlook for 2024, anticipating adjusted earnings of $5.40 per share for the first quarter [5]. Recent Developments - Reliance Steel has rebranded to reflect its broader service offerings beyond steel and aluminum [6]. - Recent acquisitions include Cooksey Iron & Metal, contributing approximately $90 million in revenue, and American Alloy Steel, adding $310 million in sales [6]. Valuation Insights - Following the earnings release, shares rose over 10% to $330, giving the company a $19.1 billion equity valuation [7]. - The company trades at 15 times the earnings of $22 per share for 2023, down from around $30 per share in 2022, with operating margins currently around 11-12% [7]. - Even with potential margin contraction, the company is expected to maintain strong profitability, suggesting that long-term prospects remain favorable despite current valuations [7].

Reliance, Inc. (RS) posted profits of $272.7 million or $4.70 per share in fourth-quarter 2023, down from $350.5 million or $5.88 per share in the year-ago quarter.Barring one-time items, the company recorded earnings of $4.73 per share. It topped the Zacks Consensus Estimate of $3.86.The company recorded net sales of $3,337.3 million, down around 7.6% year over year. The top line beat the Zacks Consensus Estimate of $3,275.1 million.The company officially rebranded as Reliance, Inc., departing from its for ...

Reliance Steel & Aluminum Co. (NYSE:RS) Q4 2023 Earnings Conference Call February 15, 2024 11:00 AM ET Company Participants Kim Orlando – ADDO Investor Relations Karla Lewis – President and Chief Executive Officer Steve Koch – Executive Vice President and Chief Operating Officer Arthur Ajemyan – Senior Vice President and Chief Financial Officer Conference Call Participants Katja Jancic – BMO Capital Markets Phil Gibbs – KeyBanc Capital Markets Martin Englert – Seaport Research Partners Operator Greetings, a ...

Reliance, Inc. Reports Fourth Quarter and Full Year 2023 Financial Results and Unveils Corporate Rebranding − Second highest annual EPS of $22.64; fourth quarter EPS of $4.70 − Second highest annual cash flow from operations of $1.67 billion − Repurchased $479.5 million of common stock in 2023 − Increased quarterly dividend 10.0% to $1.10 per share (annual: $4.40) − Completed acquisition of Cooksey Iron & Metal Company on February 1, 2024 − Announced pending acquisition of American Alloy Steel, Inc. on Febr ...

Group 1 - Reliance Steel & Aluminum Co. has signed a definitive agreement to acquire all outstanding equity interests and related real estate assets of American Alloy Steel, Inc. [1] - American Alloy operates five service centers and a plate fabrication business in the U.S., with annual net sales of approximately $310 million for the 12 months ended December 31, 2023 [1][2] - The acquisition will enhance Reliance Steel's value-added processing capabilities, including burning, cutting, rolling, and bevelling [1][2] Group 2 - The transaction is expected to be completed within the next 60 days, pending regulatory approval and customary closing conditions [2] - The current management team of American Alloy is likely to remain in place after the transaction [2] - Reliance Steel's shares have increased by 21.2% over the past year, contrasting with a 5.6% decline in its industry [4] Group 3 - Reliance Steel currently holds a Zacks Rank 2 (Buy) [5] - Other better-ranked stocks in the basic materials sector include United States Steel Corporation, Carpenter Technology Corporation, and Alpha Metallurgical Resources Inc. [5][6] - United States Steel has a Zacks Rank 1 (Strong Buy) and has seen a 56.1% increase in shares over the past year [5]

Core Insights - Reliance, Inc. reported its second highest annual earnings per share (EPS) of $22.64 and a fourth quarter EPS of $4.70 [1] - The company achieved a second highest annual cash flow from operations of $1.67 billion [1] - Reliance completed the acquisition of Cooksey Iron & Metal Company and announced a pending acquisition of American Alloy Steel, Inc. [1][17][18] - The company rebranded to Reliance, Inc. to reflect its evolution beyond just steel and aluminum [1][19] Financial Performance - Net sales for Q4 2023 were $3,337.3 million, a decrease of 7.9% from Q3 2023 and a 13.0% decline year-over-year [2] - Gross profit for Q4 2023 was $1,021.6 million, down 5.1% sequentially and 13.4% year-over-year [2] - The gross profit margin for Q4 2023 was 30.6%, slightly up from 29.7% in Q3 2023 but down from 31.3% in Q4 2022 [2] - Net income attributable to Reliance for Q4 2023 was $272.7 million, a decrease of 7.6% from Q3 2023 and 22.2% from Q4 2022 [3] Cash Flow and Capital Allocation - Cash provided by operations in Q4 2023 was $525.6 million, a 12.8% increase from Q3 2023 but a 21.1% decrease year-over-year [4] - Free cash flow for 2023 was $1,202.5 million, down 32.3% from 2022 [5] - The company repurchased $479.5 million of common stock in 2023 and increased its quarterly dividend by 10.0% to $1.10 per share [1][15][16] Acquisitions - The acquisition of Cooksey Iron & Metal Company was completed on February 1, 2024, with annual net sales of approximately $90 million [17] - Reliance has entered into a definitive agreement to acquire American Alloy Steel, Inc., which had annual net sales of approximately $310 million [18] Market Demand and Outlook - Tons sold in Q4 2023 were 1,354.2 thousand, a decrease of 4.7% from Q3 2023 but an increase of 4.9% year-over-year [7] - The company expects tons sold to increase by 9% to 11% in Q1 2024, with average selling prices projected to rise by 1.0% to 3.0% [21] - Demand in non-residential construction and commercial aerospace remained strong, with expectations for continued growth in these sectors [10][11]

Core Viewpoint - Reliance Steel & Aluminum Co. has announced a definitive agreement to acquire American Alloy Steel, enhancing its capabilities in specialty carbon and alloy steel distribution and processing [1][2]. Company Overview - Reliance Steel & Aluminum Co. is a leading global diversified metal solutions provider and the largest metals service center company in North America, with over 315 locations in 40 states and 12 countries [3]. - The company distributes more than 100,000 metal products to over 125,000 customers across various industries, focusing on small orders with quick turnaround and value-added processing services [3]. Acquisition Details - The acquisition of American Alloy, which reported annual net sales of approximately $310 million for the year ending December 31, 2023, is expected to close within 60 days, pending regulatory approval [1][2]. - American Alloy operates five service centers in the U.S. and has a joint venture in Canada, serving customers in military, infrastructure, power generation, and other sectors [1][2]. - The addition of American Alloy will enhance Reliance's value-added processing capabilities, including burning, cutting, rolling, and beveling [1][2]. Strategic Implications - The acquisition is anticipated to strengthen Reliance's product portfolio by adding specialty carbon steel plate and new fabrication capabilities [2]. - Reliance aims to leverage collaboration between American Alloy and its existing companies to expand product and service offerings [2].

Core Viewpoint - Reliance Steel & Aluminum Co. has acquired Cooksey Iron & Metal Co., enhancing its presence in the Southeastern market and expanding its service capabilities [1][2]. Company Overview - Cooksey Iron & Metal Co. is a metals service center that processes and distributes finished steel products, with annual net sales of approximately $90 million for the 12 months ending December 31, 2023 [1]. - Cooksey operates in multiple states including Georgia, Florida, Alabama, and South Carolina, serving a diverse customer base [1]. Market Position and Performance - The acquisition of Cooksey strengthens Reliance Steel's position in the fast-growing Southeastern market, known for premium customer service and high-quality products [2]. - Reliance Steel's shares have increased by 24.3% over the past year, contrasting with a 2.7% decline in its industry [2]. Demand and Sales Projections - Reliance Steel anticipates healthy underlying demand in its end markets for the fourth quarter of 2023, projecting year-over-year growth in tons sold between 3.5% and 5.5% [2]. - A sequential decline of 4-6% in tons sold is expected, consistent with typical seasonal patterns [2]. Pricing and Profit Margins - The company expects average selling prices per ton sold in the fourth quarter of 2023 to decrease by 4% to 6% compared to the third quarter [3]. - A temporary and modest reduction in gross profit margin is projected due to declining price trends [3]. Earnings Forecast - Reliance Steel projects adjusted earnings per share in the range of $3.70 to $3.90 for the fourth quarter [3].