10 Best Aluminum and Aluminum Mining Stocks to Buy Now

6. Reliance, Inc. (NYSE:RS)

Number of Hedge Fund Holders: 31

Reliance, Inc. (NYSE:RS) is next on our list of the best aluminum stocks to buy. It is a leading global provider of diversified metal solutions and the largest metals service center company in North America, as well as a key supplier of aluminum products, among other metals. The company operates over 320 locations across 40 U.S. states and 12 countries. It provides value-added metals processing services and distributes more than 100,000 metal products, including aluminum, carbon steel, and stainless steel, to over 125,000 customers across various industries.

In Q2 2024, Reliance, Inc. (NYSE:RS) reported a 4% increase in tons sold compared to Q1 2024, driven by three acquisitions made this year and organic growth. This performance showcased the effectiveness of Reliance’s diversification strategy. EPS fell to $4.67, mainly due to declining carbon steel prices. Nevertheless, Reliance maintained a robust gross profit margin of 29.8%, thanks to its strategic investments in value-added processing capabilities.

On the financial front, Reliance generated $366.3 million in cash flow from operations in Q2 2024, which supported the acquisitions of American Alloy Steel, Inc. and Mid-West Materials, Inc. Additionally, Reliance has paid quarterly cash dividends for 65 consecutive years, underscoring its strong cash position.

Notably, despite witnessing positive net income growth, the increase is lower than expected due to declining carbon steel prices impacting margins. Moreover, while the company completed strategic acquisitions, the overall profitability remains under pressure from a challenging pricing environment.

Having already made three acquisitions in the year, on July 15, Reliance, Inc. (NYSE:RS) announced its agreement to acquire certain assets of Ferragon Corporation (“FerrouSouth”), a leading toll processing operation based in Mississippi. This acquisition is expected to enhance Feralloy’s capacity by integrating these assets into its existing operations.

The stock has seen a 5.66% decline over the past month, mainly due to integration risks associated with the Ferragon acquisition. However, year-to-date, Reliance’s stock has risen by 2.83%, reflecting its strong market position and diversified portfolio.

Analysts project a 22.10% upside potential for Reliance Inc. Additionally, 31 hedge funds at the end of Q2 2024  invested $509 million in the company, as per Insider Monkey’s database, indicating strong confidence in its prospects. This positions Reliance Inc. as a favorable stock to consider, which is why it has made it to our list of the best aluminum stocks.