Gerdau Ameristeel Corp (GNA.TO) Buy, Sell or…

Gerdau Ameristeel Corp (GNA.TO)

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BUY

This company is not big enough to make it into his portfolio. However, the fundamentals are quite good. Based on their December balance sheet, his model prices $24.76, a positive differential of about 54%. Any pull back to $14.50 would be a great buying opportunity.

BUY

This is about the last one of these standing in the public market in Canada. Had mixed results, but would buy it anyway.

DON'T BUY

Fairly well diversified. A Brazilian company that bought Canadian operations. An economically sensitive product, China has been moving into the market. There will be other places you could make more money.

BUY

2nd largest mini-mill in North America. Trades at around 7 X earnings. Not tied to the consumer i.e. autos, washers, etc. which he likes. Geared towards infrastructure. Cash flow is strong and the balance sheet has improved significantly.

BUY

Has gone from $6 to over $12 and is probably overbought. Wouldn't be surprised if there were a correction. It is a very up trending stock.

BUY

Steel continues to be a strong sector. A very good solid company.

BUY

Loves this stock. Good management. They should earn $1 US and at the present price, you can’t go wrong with it. The balance sheet keeps getting better and they are looking for acquisitions. Pulled back because steel prices peaked and rolled over. Expect there will be further dividend increases.

BUY

Sold all his steel stocks except for this one. Continues to announce great earnings. to the tune of US$0.25 a quarter. Extremely strong management. Not widely covered. They are into non-residential construction in the US such as road and bridge. A new highway bill has been announced. Dirt cheap.

BUY

His model price is substantially above its curent price at around $20.

BUY

Has lots of upside potential and on the P/E side it's ridiculous. Looks attractive.

DON'T BUY

Has slid off a great deal. Steel is a very cyclical industry. Has been enormously profitable over the last couple of years. Well run company, but this is probably not the time you want to be in a deep cyclical like steel.

TRADE

The group including Gerdau Ameristeel (GNA-T), Algoma (AGA-T), Ipsco (IPS-T) and Dofasco (DFS-T) to a lesser extent has come off of its peak. Looks like steel prices have peaked for the cycle yet these stocks are extremely statistically cheap. Could be some activity like takeovers, as cash builds up. Find one that is cheap and could be taken over.

BUY

Likes the company. You have to slice your steel companies into those that have auto exposure versus those that don't. This one doesn't. More geared towards infrastructure spend which is an area he likes. Well run. Have raised money. Solid balance sheet.

BUY

Doing very well. Just broke out of a major inverse head and shoulder which is a very positive formation. Stock had run up to $9 and has fallen below $8. Would be a much more attractive stock than Dofasco (DFS-T).

HOLD

Hot rolled steel prices have rolled over a little bit, so the stocks have given back a little. Doesn't expect to see another run, but they are extremely profitable high prices. If they do just go sideways here, they'll make a fair bit of money. Prefers Algoma (AGA-T) for the leveraged side of steel. To be safe, you would go to the fabricators, Harris (HSG-T) or Russel (RUS-T).

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Gerdau Ameristeel Corp (GNA.TO)