Here's Why You Should Retain Reliance Stock in Your Portfolio

Core Viewpoint - Reliance, Inc. is benefiting from a diversified business model, strategic acquisitions, and strong liquidity despite facing pricing and demand challenges [1][2]. Group 1: Acquisitions and Liquidity - Reliance has adopted an aggressive acquisition strategy, completing 76 acquisitions since its IPO in 1994, enhancing product diversification and processing capabilities [3]. - Recent acquisitions, including Rotax Metals, Admiral Metals, and Nu-Tech Precision Metals, align with its strategy to invest in high-quality businesses and expand its market reach [4]. - The acquisition of FerrouSouth's toll processing assets in August 2024 enhances Reliance's toll processing capabilities and capacity in the Southeastern United States [5]. - In Q3 2024, Reliance returned $60.6 million to shareholders in cash dividends and repurchased shares worth$432 million, with a cash and cash equivalents balance of $314.6 million [6]. - The company generated$463.9 million in cash flow from operations during the same quarter, supported by solid profitability and effective working capital management [6]. - Reliance entered into a five-year unsecured revolving credit facility worth $1.5 billion, strengthening its liquidity position and capital allocation strategies [7]. Group 2: Pricing and Demand Challenges - Reliance faced pricing pressure in Q3 2024, with an average selling price per ton sold declining approximately 12% year over year [8]. - The company anticipates a further decline in average selling prices by 1.5-3.5% sequentially in Q4 2024 due to ongoing pricing pressures across carbon steel products [8]. - Reliance expects a 6-8% decrease in tons sold in Q4 2024 compared to Q3 2024, influenced by seasonal trends and increased macroeconomic and political uncertainty [9].