Steel Dynamics, Inc. (STLD): Are The Signals Sending Scary Signs?

On November 29, 2019, Steel Dynamics, Inc. (NASDAQ:STLD) shares lost -0.71% or -0.24 points to close at $33.73 with a thin trading volume of 1.429 million shares. It opened the trading session at $33.95, the shares rose to $34.45 and dropped to $33.695, the range by which the price of stock traded the whole day. The company now has a market cap of $7.2 billion and currently has 213.49 million outstanding shares. Steel Dynamics, Inc. (STLD) stock has accumulated 9.62 percent of market value in 21 trading days.

STLD stock’s trailing 3-year beta is 1.68, meaning there will be a greater rate of return, although posing a higher risk. The part of a firm’s profit given to each outstanding share of regular stock was $3.64 share in the trailing 52 weeks. The stock’s value surged 12.28 percent year to date (YTD) compared to a decline of -3.77 percent in 52 week’s period. The firm’s shares are still trading -14.28 percent below its 1-year high of $39.35 and 34.79 percent up from 52-week low of $25.02. The average consensus ranking on the company is 2.5, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a sell.

Steel Dynamics, Inc. (STLD) is most likely going to rise -0.98 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $46-month high price target. This represents a whopping 36.38 percent increase from the current trading of shares. The 52-week median price target given by the analysts is $32, which means a return possibility of -5.13 percent in comparison with the closing price of the stock of $33.73 on November 29. The lowest price set for the stock is $30 — just above -11.06 percent from STLD share price now.

Past records have indicated that shares in Steel Dynamics, Inc. rose on 25 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of STLD’s Q4 earnings on January 23. Analysts are predicting revenue to suffer decline of -19.1 percent to $2.35B in the financial fourth quarter, while EPS will soar by about -56.49 percent to $0.57 per share. In the last quarter, it earnings of $0.87 per share came better than the $0.69148, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $2.53B, missing the $2.67B analysts had expected. Earnings are seen to rise by 104 percent this year, -12.36 percent in the coming year.

Let’s take a glimpse at some insider activity at Steel Dynamics, Inc. (NASDAQ:STLD) and observe the pattern. The earliest insider trade happened on 09/06/2019. Alvarez Miguel gathered a total of 8.92 thousand shares of the firm at average share price of $27.72. The total amount for the purchase was set at $247.26 thousand. On completing this exchange, the Senior Vice President account balance was 8.92 thousand shares. The stock grew 21.68 percent from that insider purchase. On 07/25/2019, BUSSE KEITH E, Director, did a sale of 0.5 thousand shares at a price of $32.13 per share. This got rid of 16.07 thousand shares from the insider’s fortune and the stock experienced a 4.98 percent rally in price since the news became public. This exchange saw 1.01 million shares get out from the Director account.

On 06/05/2019, Senior Vice President Pushis Glenn recorded a purchase transaction valued at $149.99 thousand. The purchase at $26.13 a share has added 5.74 thousand shares into the insider’s portfolio position. Meanwhile, shares price witnessed 29.09 percent increase since the transaction reporting date. The company insider is left with 93.2 thousand shares remaining in the account. RINN RUSSELL B, who works as Executive Vice President at the company, performed a purchase of 2 thousand shares in a transaction worth $51.16 thousand. The acquisition recorded on 05/31/2019 was priced at $25.58 per share. The stock price soared 31.86 percent since the transaction. RINN RUSSELL B currently holds a stake of 222.46 thousand in STLD stock which is worth $7.5 million after the insider buying.

The stock is lingering around the initial support level of $33.47. After this, the following support is at the zone of $33.2. Up until the time the STLD stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 69.67 on the daily chart, and this may be a cause for concern. In case the price goes below $33.2 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $34.22 level may cause a pull-back move approaching $34.71 mark.

Steel Dynamics, Inc. (STLD) shares are trading at a P/E ratio of 9.2 times earnings posted in the trailing 12 months. The industry STLD deals with has an average P/E of 10. Its P/B ratio is standing at 1.8X compared to the 0.8 industry average. It is additionally sporting a 0.7 on the Price-to-Sales ratio, compared to the industry’s P/S average of 0.4. Steel Dynamics, Inc. has a 15.8% gross profit margin, with its operating margin around 10.6%. Alongside this, the company’s net profit margin currently stands at 7.4%.