Topic: How To Invest

Power Growth Investor Hotline – Friday, August 21, 2020

Article Excerpt

RUSSEL METALS INC., $19.04, is a buy. Through their shares, investors tap one of North America’s largest metal distributors: the company (symbol RUS on Toronto) serves 33,000 clients at 48 locations in Canada and 16 others in the U.S. Governments have designated most of Russel’s operations as “essential,” so they continue to operate during the COVID-19 pandemic. Even so, the company’s revenue in the three months ended June 30, 2020, fell 37.2%, to $588.1 million from $936.7 million a year earlier. That reflects the slowing economy and lower oil prices (Russel supplies pipes to oil and gas drillers). Overall earnings were $4.6 million, or $0.07 a share. That’s down 69.4% from $30.8 million, or $0.50, a year earlier. The company’s strong balance sheet should help it cope with the COVID-19 crisis. As of June 30, 2020, Russel held cash of $89.1 million, and its long-term debt of $445.4 million is a manageable 38% of its market cap. In addition, the company is only…