Brazilian steel maker,
Companhia Siderurgica Nacional
recently announced the approval of its board of directors of a new
share buyback program. The repurchases will be done solely to
improve shareholder return.
As disclosed, Companhia Siderurgica Nacional has the authorization
to buy back approximately 26.8 million shares at a price not
exceeding the market value. The shares bought back will be held in
treasury for cancellation or sale. Having begun on Jun 26, the
program will likely conclude on Jul 25, 2014.
Earlier, in May 2014, Companhia Siderurgica Nacional completed the
buyback of 67.9 million shares, while in April it finished
repurchasing approximately 70.2 million shares. These
authorizations were made in April and March respectively.
In addition to share buybacks, Companhia Siderurgica Nacional
follows a consistent policy of rewarding its shareholders through
payment of dividends and interest on equity, with roughly R$1.7
billion paid in 2013.
We believe Companhia Siderurgica Nacional is well positioned to
benefit from rising infrastructural demand worldwide. The steel
industry in Brazil is likely to get a boost from substantial
investments planned for the development of ports, railroads,
airports, wind farms and roads, among others. Apart from steel,
Companhia Siderurgica Nacional's exposure to iron ore mining,
cement and infrastructure projects will also work in its favor.
Companhia Siderurgica Nacional currently has a market
capitalization of roughly $6.2 billion and holds a Zacks Rank #4
(Sell). Some better-ranked stocks in the industry include
Grupo Simec S.A.B. de C.V.
Universal Stainless & Alloy Products Inc.
). While Grupo Simec and Universal Stainless & Alloy sport a
Zacks Rank #1 (Strong Buy), ThyssenKrupp holds a Zacks Rank #2
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