8 Most Profitable Penny Stocks To Invest In

2. Gerdau (NYSE:GGB)

TTM Net Income: $905.6 million 

5-Year Net Income CAGR: 20.57%

Share Price as of October 9: $3.46

Number of Hedge Fund Holders: 15

Gerdau (NYSE:GGB) is the largest producer of long steel in the Americas, producing a range of steel products, including long steel products like rebar and wire rod, and flat steel products like hot-rolled and cold-rolled coils. It serves various industries, including construction, automotive, and manufacturing. Its financial performance is influenced by factors such as global steel demand, commodity prices, and economic conditions.

In the second quarter of 2024, the company’s earnings per share value was at $0.07. The revenue generated in this period was $2.94 billion, recording a decline of 21.23%. This decline was followed by missed Street expectations for the quarterly revenue. This was primarily due to an oversupply in the steel market, increased competition from imports, and a decrease in crude steel production and shipments. Gerdau (NYSE:GGB) experienced a 5.3% drop in production and a 7.5% decline in shipments year-over-year, leading to lower sales prices.

The US automotive market is recovering, reaching 16 million units in 2024. Brazil’s special steel market is optimistic due to a 32.1% growth in heavy-duty production. However, uncertainties and imported steel remain challenges. The company improved its steel production capabilities. Argentina’s steel market is recovering slowly from a low point due to inflation. Uruguay’s steel consumption remains strong. Peru’s GDP grew 5.5%, driven by construction and other sectors. Brazil’s long and flat steel market faces challenges from imported steel and production disruptions. However, positive indicators for the construction industry are expected.

Despite short-term challenges, the company’s prospects remain positive, driven by industry recovery, increased production efficiency, and favorable economic conditions in key markets. Its strategic focus on innovation and market diversification positions it well for long-term growth.