Dear PGM CAPITAL Blog readers,
On Thursday, October 27 2011, after the bell, Brazilian Steel Maker,
Companhia Siderúrgica Nacional (CSN), (BM&FBOVESPA: CSNA3) (NYSE: SID) reported its Q3-2011 financial results as follows:
Highlights:
- Net revenue totaled R$12.4 billion in 9M11, 12% up on the same period last year and a new Company record. In 3Q11, net revenue reached R$4.2 billion
- Net income amounted to R$2.9 billion in 9M11, 38% up on 9M10 and also a new record. In 3Q11, net income was R$1.1 billion
- CSN posted record iron ore sales volume of 21.3 million tonnes in the first nine months, 13% up on 9M10.
- In 3Q11, iron ore sales volume totaled 8.0 million tonnes, 18% higher than in 2Q11 and also another record.
- Net revenue from mining totaled R$4.3 billion in 9M11, 72% up year-on-year and the Company’s highest ever figure, and R$1.6 billion in 3Q11, 4% more than the 2Q11 and also a record.
- Consolidated steel product sales volume in the domestic market, where margins are historically higher, accounted for 86% of total sales volume in 3Q11.
- CSN is a highly liquid company, with a cash position of R$15.6 billion.
Based on yesterday’s blockbuster quarter report, its closing price of US$ 9.38, a dividend yield of 7.5%, (based on yesterday closing price) and a forward P/E of 6, based on projected FY 2012 earnings of R$2.73 or US$1.47, we have a STRONG BUY rating on the company.
Disclosure:
We own Companhia Siderúrgica Nacional (CSN) in our personal portfolio and those of some clients since October 2008.
Last be but not least, before following any investing advice, always take your investment horizon and risk tolerance into consideration and keep in mind that the price of Commodities as well as the stocks of their producers can be very volatile and that sharp corrections might happen in the short term.
Yours sincerely
Eric Panneflek
Chairman