Topic: How To Invest

Stock Pickers Digest Hotline – Friday, November 11, 2016

Article Excerpt

RUSSEL METALS INC., $24.95, symbol RUS on Toronto, is one of North America’s largest metal distributors, serving 28,000 clients at 51 locations in Canada and 12 in the U.S. In the three months ended September 30, 2016, Russel’s revenue fell 17.4%, to $639.2 million from $773.4 million a year earlier. The drop is mainly because revenue at its energy products business fell 28%. It supplies pipes for oil and gas drillers. Despite the decline, earnings for the quarter rose 24.2%, to $15.9 million, or $0.26 a share, from $12.8 million, or $0.21 a share. Russel benefited from rising steel prices; they increased the value of its inventory and its profit margins. The company holds cash of $192.8 million, or $3.12 a share; its $295.7 million of long-term debt is a low 21% of its market cap. The stock yields a high 6.1%. Oil and gas clients supply about 35% of Russel’s revenue. That adds to its cyclical risk. However, the stock jumped…