We recently upgraded our recommendation on
Companhia Siderurgica Nacional
from Neutral to Outperform.
Why the Upgrade?
GERDAU SA ADR (GGB): Free Stock Analysis
NIPPON STEEL CP (NSSMY): Get Free Report
SHILOH INDS INC (SHLO): Get Free Report
CIA SIDERUR-ADR (SID): Free Stock Analysis
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The upgrade is the result of both growth prospects of the
worldwide steel industry as well as that of SID. Instabilities in
the U.S. and the Eurozone are abating while China has recently
shown solid signs of growth. All these have increased demand for
better infrastructure and modernized farming techniques and thus
for steel. According to the World Steel Association, estimated
global consumption of steel is likely to grow 2.9% in 2013 and
3.2% in 2014.
Talking of the Brazilian steel industry, demand is on the rise as
the country prepares to host major sporting events in 2014 and
2016 while major investments in infrastructures are also planned
for the development of ports, railroads, airports, wind farms and
roads, among others. According to the Brazilian Steel Institute
(IABr), crude steel production is likely to increase 5.8% in 2013
coupled with steel sales which are expected to rise by 7.6% in
To cope with the anticipated rise in steel demand, the company
has made investments to improve its production capacity of steel.
Besides steel, SID's exposure to iron ore mining, cement, and
infrastructure projects makes it an attractive stock to own.
Talking of SID's financial background, the company reported
impressive second quarter 2013 results with an earnings surprise
of 433.3%. Average earnings surprise of the trailing four
quarters is 183.3%. Additionally, we have an
of 360% for 2013 and 160% for 2014. In the last 30 days, the
Zacks Consensus Estimate for SID has gone up from loss per share
of 6 cents to earnings per share of 5 cents for 2013 and
increased by 400% for 2014.
Others Stocks to Consider:
SID, a well known Brazilian steel maker, currently has a market
capitalization of roughly $6.4 billion. Other stocks to watch out
for in the industry are
Nippon Steel & Sumitomo Metal Corporation
Shiloh Industries Inc.
), each with a Zacks Rank #1 (Strong Buy) while
) carries a Zacks Rank #2 (Buy).