10 Best Quality Penny Stocks To Buy

3. Gerdau S.A. (NYSE:GGB)

Stock Price as of September 3: $3.13

Number of Hedge Fund Holders: 15

Gerdau S.A. (NYSE:GGB) is a Brazilian company that is one of the largest producers of long steel in the Americas, with a presence across multiple countries, including Brazil, the U.S., Canada, and Argentina. The company serves various sectors such as civil construction, automotive, agriculture, and industrial manufacturing.

Gerdau (NYSE:GGB) is also a major recycler that transforms millions of metric tons of scrap into steel each year. It operates through mini-mills, integrated mills, and direct reduced iron plants. It has also expanded into specialty steel production, especially for the global automotive industry, and continues to diversify its operations. It is one of the best quality penny stocks to buy.

In its second quarter, Gerdau (NYSE:GGB) reported EPS of $0.08, which outperformed the estimates by $0.01 and revenues of $2.94 billion. In the first half of 2024, the company invested BRL 1.2 billion (1 BRL = US$0.18) in capital expenditures, with a significant portion aimed at growth and competitiveness. Moreover, at its earnings call, management said that it has a strategic plan to reduce costs by BRL 1.5 billion by early 2025. This could improve the company’s operational efficiency and profitability.

Analysts also see significant upside for Gerdau (NYSE:GGB) as it has been covered by 11 analysts with an average price target of $4.50. The average price target represents an upside of nearly 44% from its current levels on September 3.

In the second quarter, 15 hedge funds owned Gerdau (NYSE:GGB) shares worth $131.161 million. Contrarian Capital holds 20.3 million shares of the company, worth $66.9 million, and is the most significant shareholder of the company, as of June 30.