(FRD) Friedman Industries - Ratings and Ratios

Friedman Industries, Incorporated (NYSE MKT: FRD) is a U.S.-based steel manufacturing company specializing in flat-rolled and tubular steel products. Since its incorporation in 1965, the company has established itself as a key player in the steel industry, operating through two primary segments: Flat-Roll Products and Tubular Products. The Flat-Roll Products segment focuses on converting steel coils into flat sheet and plate steel, tailored to customer specifications. It also resells steel coils and offers process and storage services for customer-owned coils on a fee basis. This segment primarily serves steel distributors and manufacturers of steel-intensive products, such as railroad cars, barges, and fabricated steel components. The Tubular Products segment, on the other hand, manufactures line pipe, oil country tubular goods (OCTG), and structural pipes, primarily distributing these products through its internal sales force to steel and pipe distributors.

Headquartered in Longview, Texas, Friedman Industries has built a reputation for reliability and precision in its operations. Its strategic location in the southern United States provides access to key transportation networks, enabling efficient delivery of products to domestic and international markets. The company’s focus on customer-specific solutions and its ability to handle both small and large-scale orders have positioned it as a versatile supplier in the steel industry. Friedman Industries’ commitment to quality and adherence to industry standards ensures that its products meet the demanding requirements of its diverse customer base, ranging from construction and energy to transportation and manufacturing sectors.

The company’s financial performance reflects its operational stability and market positioning. With a market capitalization of $114.39 million, Friedman Industries operates with a price-to-earnings (P/E) ratio of 20.26, indicating a moderate valuation relative to its earnings. Its price-to-book (P/B) ratio of 0.90 suggests that the stock is trading at a slight discount to its book value, potentially attracting value investors. The price-to-sales (P/S) ratio of 0.26 highlights the company’s low valuation relative to its revenue, which may appeal to investors seeking undervalued opportunities. However, the return on equity (RoE) of 4.48% reflects modest profitability compared to industry peers.

From a technical perspective, Friedman Industries’ stock exhibits moderate volatility, with an Average True Range (ATR) of 0.71. The stock’s recent price of $15.51 is below its 20-day Simple Moving Average (SMA) of $16.63 but aligns closely with its 50-day and 200-day SMA levels of $15.57 and $15.59, respectively. This convergence of SMA levels suggests potential support for the stock price in the near term. However, the average trading volume of 16,533 shares over the past 20 days indicates relatively low liquidity, which could amplify price movements in response to market sentiment or news.

Over the next three months, Friedman Industries’ stock is expected to experience sideways to slightly bearish movement, influenced by its current technical and fundamental landscape. The convergence of the 50-day and 200-day SMA near $15.57 could act as a support level, preventing significant downside. However, the stock’s P/E ratio of 20.26 and low RoE of 4.48% may weigh on investor sentiment, particularly in a market environment favoring higher growth or profitability. Additionally, the low average trading volume could lead to increased volatility, making the stock sensitive to broader market trends or industry-specific developments. Overall, while the stock may face headwinds, its valuation metrics and operational stability could attract investors seeking defensive plays in the steel sector.