Companhia Siderurgica Nacional (ADR) (NYSE:SID): ZACKS Upgraded the Stock to ‘Outperform’


Dallas, Texas 09/23/2013 (Financialstrend) – Headquartered in So Paulo, Brazil, Companhia Siderurgica Nacional (ADR) (NYSE:SID) is an integrated steel producer primarily having operations in Brazil and offers its products to domestic as well as international markets through its sales force, distribution channels and brokers. Its key international markets are in Asia, Europe, North America and Latin America. Key business segments of the company include Steel, Mining, Cement, Logistics and Energy segments.

Recently, in the past week, equities research analysts at ZACKS upgraded their rating for the company from ‘neutral’ to ‘outperform’ in light of following key prospects for the company largely fueled by domestic as well as global growth estimates in the steel industry.

Talking about company’s financial strength, it reported net income of BRL 502 million for the 2Q13, aided by 15% growth in volume of steel shipped, 45% sales growth from mining segment and 12% sales growth in cement business.

The rock solid sales growth performance was following the construction boom in the domestic market ahead of preparations for the 2014 World Cup and 2016 Olympics. Alongside the country also has planned infrastructure investments for the development of roads, railroads, airports and ports among others. Brazilian Steel Institute estimates 5.8% increase in crude steel production as well as 7.6% increase in steel sales during 2013.

Adding to these, the World Steel Association expects 2.9% growth in global steel consumption in 2013 and believes South America to lead this growth. To take advantage of the situation, Companhia Siderurgica Nacional (ADR) (NYSE:SID) has already made investments to increase steel production capacity.

Though the company’s stock gained around 43% in last three months, overall it has delivered negative returns (-27%) year to date. The stock has traded in the 52 week range of $2.38 and $6.50. On Friday, September 20, 2013 the stock lost around 2.75% and traded in the range of $4.23 and $4.36 before closing at $4.24. Companhia Siderurgica Nacional (ADR) (NYSE:SID) has market capitalization of $6.18 billion with 1.46 billion shares outstanding.