Stock in Focus: Commercial Metals Company (CMC)

Company Profile:

Commercial Metals Company manufactures, recycles, and fabricates steel and metal products, and related materials and services in the United States, Poland, China, Germany, and internationally. The company processes and sells ferrous and nonferrous scrap metals to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers. It also manufactures and sells finished long steel products, including rebar, merchant bar, light structural, and other special sections, as well as semi-finished billets for re-rolling and forging applications. In addition, the company provides fabricated steel products used to reinforce concrete primarily in the construction of commercial and non-commercial buildings, hospitals, convention centers, industrial plants, power plants, highways, bridges, arenas, stadiums, and dams; sells and rents construction-related products and equipment to concrete installers and other businesses; and manufactures and sells strength bars for the truck trailer industry, special bar steels for the energy market, and armor plates for military vehicles. Further, it manufactures rebars, merchant bars, and wire rods; and sells fabricated rebars, wire meshes, fabricated meshes, assembled rebar cages, and other fabricated rebar by-products to fabricators, manufacturers, distributors, and construction companies. The company was founded in 1915 and is headquartered in Irving, Texas.

Recent News:

In conjunction with its first quarter earnings release for fiscal 2021, the company will be broadcast live over the Internet on Monday, January 11, 2021, at 11:00 a.m. Eastern Time (10:00 a.m. Central) with Barbara Smith, Chairman, President & CEO and Paul Lawrence, Vice President & CFO.

The company reported earnings from continuing operations were $67.8 million , or $0.56 per diluted share, in the fourth quarter of 2020, compared to $85.9 million , or $0.72 per diluted share, in the prior year period. For the full year of 2020, earnings from continuing operations were $278.3 million , or $2.31 per diluted share, compared to $198.8 million , or $1.67 per diluted share in the prior year.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

CMC’s strengths can be seen in its strong growth and better profitability compared with its peers. Its net income and revenue have increased over recent years. Technical indicators signal the bullish signs, as there is a bullish crossover in MACD and Stochastic oscillator, the RSI stands at around 52 with positive bias. We rate Commercial Metals Company (CMC) a STRONG BUY.