Headquartered in London, Ferroglobe PLC (GSM) is one of the world’s largest producers of silicon metal and its alloys and manganese alloys that operates across Canada, France, and the United States, among other regions. Its stock has attracted significant investor attention based on the U.S. International Trade Commission’s (ITC) final vote on July 28 that silicon metal imports from Malaysia have materially injured the U.S. industry. The U.S. Department of Commerce (DOC) will issue a formal antidumping duty order covering all imports from Malaysia for at least five years. GSM’s stock has surged 58.5% over the past month to close Friday’s trading session at $9.37.
However, the stock is currently trading 16.7% below its 52-week high of $11.25, which it hit on September 2, 2021. Furthermore, GSM’s revenue and total assets have declined at CAGRs of 12.7% and 13.8%, respectively, over the past three years. In addition, its net debt came in at $358 million in the second quarter (ended June 30, 2021) compared to $334 million in the first quarter (ended March 31, 2021). And its business could continue to be impacted by the COVID-19 pandemic. So, its near-term prospects look bleak.
Here are the factors that we think could shape GSM’s performance in the coming months:
Unable to Fully Capitalize on Soaring Metal Prices
GSM’s average selling price for silicon metal came in at $2,347 per MT for the second quarter, ended June 30, 2021, representing a 5.9% year-over-year rise. While its...
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