Metals service center Reliance Steel & Aluminum (RS) said Tuesday that its third quarter earning will top Wall Street estimates, citing higher metal selling prices.
The Los Angeles-based company said it expects profits of 40 cents to 45 cents per share, which would easily beat the average analyst estimate for 28 cents per share. A recent rise in metals prices have boosted its margins from historically low levels in the second quarter.
Reliance Steel shares rose $1.24, or +3%, in morning trading Tuesday.
The Bottom Line
We had removed shares of RS from our "recommended" list on May 13, when the stock was trading at $36.13. The company has a dividend yield of .95%, based on last night's closing stock price of $42.26. The stock has technical support in the $37-$40 price area. If the shares can keep building momentum, we see overhead resistance around the $46 price levels. We would remain on the sidelines for now, but we are watching the shares closely for a possible upgrade.
