RE:Today Evaluation of TSLWell, the Steel Industry is quite cyclical, but I was impressed by their turnaround from 2019 to 2020. The SP has moved up but I don't believe investors are giving them full credit for their 1st Q performance.
TSL had a couple of good years in 2015 & 2016. After posting an EPS in 2016 of 44 cents, they traded consistantly over $4 with highs around $4.60.
With some huge increases in infrastructure (in general) spending over the next couple of years, TSL is looking good.. with a 22 cent EPS for only one quarter.
The average P/E ratio for the Steel industry is 13 to 15. I'd estimate TSL's eps for 2021 at 70 cents to $1. If, for example, it comes out at 75 cents, then based on the average P/E, you would expect them to trade between $9.75 & $11.25.
If you apply their current P/E ratio of 11.4 the SP would be $8.55. (based on Year 2021 EPS).
Compared to 2016, TSL has:
- lower debt
- lower number of shares outstanding (due to buybacks)
- and a small quarterly dividend