Steel Stock Up 47% in a Year and This Fund Just Walked Away From a $6.5 Million Position

Core Viewpoint - Kawa Capital Management has completely liquidated its position in Gerdau S.A., selling 2,094,404 shares for an estimated value of $6.49 million, which significantly reduces its exposure to the company from 11.8% to 0% of its 13F AUM [2][3][4]. Company Overview - Gerdau S.A. is a leading steel producer in the Americas, offering a diverse range of steel products including semi-finished billets, long rolled products, special steels, flat products, and iron ore [9][10]. - The company operates a vertically integrated business model that includes steel production, mining, and distribution, generating revenue from direct sales, distributors, and a retail network across the Americas [9]. - Gerdau serves various sectors such as construction, manufacturing, automotive, agricultural, oil and gas, wind energy, and infrastructure, targeting both industrial clients and resellers [9][10]. Financial Performance - As of January 20, Gerdau's share price was $4.16, reflecting a 47% increase over the past year, significantly outperforming the S&P 500's 14% gain during the same period [4]. - The company reported a market capitalization of $8.60 billion, with a trailing twelve months (TTM) revenue of $13.10 billion and a net income of $564.19 million [5]. Recent Developments - The recent transaction by Kawa Capital represents a 15% change in reported 13F AUM, indicating a strategic shift in portfolio management [7]. - Gerdau has demonstrated strong performance due to pricing discipline, resilient North American demand, and a streamlined cost structure, which has positively impacted its financial results [11]. - The company has maintained steady cash generation and continued capital returns, including dividends and buybacks, even as steel markets have normalized [12].