Insider Activity Casts a Cloud Over Steel Dynamics, Inc. (STLD)

Despite closing -1.58 points lower on 06 December, Steel Dynamics, Inc. (NASDAQ:STLD) remains a key investment for many, but the stock is also a popular trading vehicle. Here’s how to trade it using charts and trading levels Friday. The shares dropped -4.55 percent at $33.14 with a heavy trade volume of 3.808 million shares. After opening the session at $33.64, the shares went as high as $34.17 and as low as $33.01, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $7.56 billion and now has 228.12 million shares outstanding. Steel Dynamics, Inc. (STLD) stock has lost -18.85 percent of market value in 21 trading days.

STLD stock has a trailing 3-year beta of 1.38, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $4.71 a share in the trailing twelve months. The stock’s value has fallen -23.16 percent year to date (YTD) against a decline of -14.43 percent in 12 month’s time. The company’s shares still trade -36.39 percent away from its 1-year high of $52.10 and -0.72 percent down from 52-week low of $33.38. The average consensus rating on the company is 2.1, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Steel Dynamics, Inc. (STLD) will probably climb 56.04 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $59-month high price target. This represents a whopping 78.03 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $51.5, which represents a return potential of 55.4 percent when compared to the closing price of the stock of $33.14 on Thursday, December 06. The lowest price target for the stock is $34 — slightly more than 2.6 percent from STLD’s current share price.

History has shown that shares in Steel Dynamics, Inc. have gone up on 22 different earnings reaction days and are predicted to add 0.03 percent when the company reports upcoming earnings.

Let’s take a look at some insider activity at Steel Dynamics, Inc. (NASDAQ:STLD) and see the pattern. The earliest insider trade took place on 11/28/2018. Teets Richard P Jr gathered a total of 20 thousand shares of company at average share price of $33.85. The total for the purchase was set at $677 thousand. After this transaction, the Director account balance stood at 5.12 million shares. The stock lost -1.36 percent since that insider purchase. On 09/19/2018, Graham Christopher A, Senior Vice President, sold 10.8 thousand shares at a price per share of $47.61. This removed 514.19 thousand shares from the insider’s fortune and the stock saw a -29.87 percent retreat in value since the news became public. This transaction left 26.09 thousand shares in the Senior Vice President account.

On 06/11/2018, Director Busse Keith E performed a sale transaction worth $180.65 thousand. This sale at $50.32 each has eliminated 3.59 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -33.64 percent decrease since the transaction was reported. The insider now is left with 1.01 million shares remaining in the account. Kolb Jurgen Dr, who performs the Director job, sold 13.42 thousand shares for $686.01 thousand. The disposal occurred on 06/11/2018 was priced at $51.13 per share. The share price plunged -34.7 percent since the reporting date. Kolb Jurgen Dr now left with a stake of 36.48 thousand STLD stock worth $1.21 million after the insider selling.

The stock is currently hovering around the first support level of $32.71. Below this, the next support is placed in the zone of $32.28. Till the time, the STLD stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 27.21 on daily chart, which may remain a cause for comfort. If the price breaks below $32.28 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $33.87 mark may result into a pull-back move towards $34.6 level.

Shares of Steel Dynamics, Inc. (STLD) are trading at a P/E ratio of 7.16 times earnings reported for the past 12 months. The industry STLD operates in has an average P/E of 10.53. Its P/E ratio went as low as 16.45X and as high as 29.62 over the 5-year span.Further, it is sporting a 0.67 on the Price-to-Sales ratio. Compare this with the industry average P/S of 0.55. 18.9 percent is the gross profit margin for Steel Dynamics, Inc. and operating margin sits at 13.8 percent. Along with this, the net profit margin is 11.5 percent.