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Reliance Steel (RS) is nearing a buy point of 211.76 after a long consolidation, according to IBD MarketSmith.
The stock jumped back above the 50-day moving average on July 28 after surging past its 200-day line on July 7.
Reliance Steel is one of the leaders in the Metal Processing and Fabrication industry group, which is ranked 24th among IBD's 197 industry groups.
The company is in the business of producing over 100,000 metal products, such as carbon steel tubing and steel plates; aluminum bars and tubes; heat-treated aluminum plates, sheets and coils; alloy bars, rods, and tubes; and stainless steel bars and tubes. It has over 125,000 customers in the aerospace, construction and transportation industries. Commercial Metals (CMC) ranks first in the group.
Reliance Steel's Composite Rating is a near perfect 98, according to the IBD Stock Checkup. Its Relative Strength Rating is 89.
The company has seen earnings grow substantially for six straight quarters, resulting in a strong EPS Rating of 98. Four of those quarters saw triple-digit earnings growth.
For its second quarter, Reliance Steel saw sales increase 37% from the year-ago period and 4.4% from the previous quarter, to $4.681 billion.
The company also declared a quarterly dividend of 87 cents a share. In fact, its strong record of dividends payments have enhanced total returns to shareholders. The annualized dividend yield is 1.8%, according to MarketSmith.
The next earnings call is scheduled on Oct. 27.
The number of mutual funds holding the stock has been increasing since December. That is two quarters of increasing fund ownership. Stronger institutional ownership is a positive for a stock since it means that fund managers have conviction about the stock.
The company has also been repurchasing its shares. After repurchasing 1.1 million shares at an average cost of $178.61 last quarter, the company repurchased an additional 582,000 shares at an average of $171.94 a share in July.
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7/24/2022 Reliance Steel & Aluminum is building a base and near a possible buy zone ahead of its next quarterly earnings...
7/24/2022 Reliance Steel & Aluminum is building a base and near...
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Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice.
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