I liked Gerdau (NYSE:GGB)
for its leverage to a Brazil recovery story back in October, and the
relatively short time since, that story has really caught on with
investors. Between the prospect of significant improvement in Brazil in
2020 and more or less stable (but still quite profitable) conditions in
North America, Gerdau is looking at solid bounce in 2020 that should
make it one of the better growth stories in steel next year.
With the shares running up a third since my last article,
I really can't say these shares are undervalued, though the relative
value proposition is still fairly attractive next to the likes of Nucor (NUE) and Steel Dynamics (STLD) and considering the more promising near-term outlook relative to Ternium (TX).
I usually like to buy commodity stories with a wider margin of error in
the valuation, but as a momentum/trading idea, I can't really say
Gerdau is a bad one.
Read the full article here:
Growing Signs Of A Brazilian Recovery Have Fueled A Nice Rally In Gerdau Shares
No comments:
Post a Comment