Reliance Steel & Aluminum Co (RS, Financial) will never make it onto the “disruptive innovation” list of hot growth stocks, but that hasn't kept it from outperforming a lot of big names recently. In business since 1939 and going public in 1994, the Los Angeles-based materials company now operates from 300 locations in U.S. 40 states and 13 countries.
The stock just hit a new all-time high above the $194 mark, outperforming Apple (AAPL, Financial), Microsoft (MSFT, Financial) and Coinbase (COIN, Financial) on a trailing 12-month basis. The market capitalization of Reliance sits at $12.01 billion with an enterprise value of $13.58 billion.
According to their website, “Reliance is a leading diversified metal solutions provider, offering value-added metals processing services and distributing over 100,000 metal products to more than 125,000 customers in a broad range of industries.”
With a price-earnings ratio of just 8.85, the stock qualifies as a value stock at a time when the price-earnings ratio of the S&P 500 sits at 25.44. Reliance trades at a price-book ratio of 1.99, a price-sales ratio of 0.85 and a price-to-free-cash-flow ratio of 31.06. Shareholder equity greatly exceeds long-term debt and the current ratio is a solid 3.90.
The latest full-year earnings grew 288.40% year-over-year. For the past five years, the earnings per share growth rate comes in at 39.50%. Analyst expectations call for a slower earnings growth rate in the coming years.
Reliance pays investors a dividend yield of 1.51%. For a New York Stock Exchange-listed security, it’s relatively lightly traded with an average daily volume of about 444,000 shares.
In November, 2021, Goldman Sachs (GS, Financial) moved its rating on Reliance from “neutral” to “buy” with a price target of $190, which proved accurate.
The GuruFocus summary of financials finds three good signs, four medium warning signs and one severe warning sign for Reliance:
Large investors who made purchases of the stock late last year include the Yacktman Focused Fund (Trades, Portfolio), the Yacktman Fund (Trades, Portfolio) and Steven Cohen (Trades, Portfolio)’s hedge fund.
