Russel Metals

I am reviewing this stock (TSX-RUS) today as I have received its annual report. I bought this stock in 2007 as one to replace my Loblaws stock. I have lost some 26% per year on this stock. This is an industrial stock and is into metal processing and we are in a recession. It is no surprise that this stock has lost value and has suffered at this time. However, I intend to continue to hold my shares.

Most growth rates on this stock are good for both the 5 and 10 year periods. There are some exceptions. The first to mention is cash flow, which can vary a lot and it has gone down over the last 5 years. Over the last 10 years, it has only made slight gains. The other thing is that this stock has a very good track record of increased dividend, although they had to lower then in this current recession. People who had bought this stock over the last 5 or 10 years have made money as the stock price has increased and dividends have been good.

The Liquidity Ratio and the Asset/Debt Ratio have always been good for this stock. However, these ratios do not always tell the whole story. It was because of the terms of some debt covenant that they had to lower the dividend this year. They could also be forced to lower dividends some more, but most people think this is unlikely. However, it is still a concern.

When I originally reviewed this stock at the receipt of the annual report, the Accrual Ratio was very high at 13%. I have updated my spreadsheet due to the publication of the March 2009 Quarterly Report. In this report, the Accrual Ratio has come down considerably and the Total Accruals are negative.

As I said previously, I intend, at the present time to keep the stock I have. Tomorrow, I will review what the analysts are saying about this stock.

This company does metal distribution and processing North America. It operates in three segments of metals service centers, energy tubular products and steel distributors. Its web site is www.russelmetals.com. See my spreadsheet at www.spbrunner.com/stocks/rus.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets.