Sell
Reliance Steel (RS)
from Cabot Benjamin Graham Value Investor, recommended at $50 in the August 3, 2012 Daily Alert and Investment Digest issue 724.
Reliance Steel (RS) reached its Minimum Sell Price of 74.66 today. RS was first recommended in the Classic Value Model in the April 2012 Cabot Benjamin Graham Value Investor at 38.00 and has advanced 96.5% during the past 18 months compared to a gain of 53.8% for the Standard & Poor’s 500 Index.
Earnings per share have dropped more than 25% during each of the past two quarters. The current P/E ratio for RS is 16.9, which is exceptionally high compared to RS’s 10-year average P/E of 9.3. Further gains in the stock price are unlikely. I advise selling your RS shares now.
J. Royden Ward, Cabot Benjamin Graham Value Investor, www.cabot.net, 978-745-5532, November 6, 2013