BRIDGEVILLE, Pa. - Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) is set to be included in the Russell 2000 and Russell 3000 Indexes starting from July 1, as announced in a recent preliminary list of additions. This inclusion follows the annual reconstitution of the Russell US Indexes, which ranks the 4,000 largest U.S. stocks by total market capitalization as of April 30.
Christopher M. Zimmer, President and CEO of Universal Stainless, expressed satisfaction with this development, stating, "We are pleased to once again join the Russell 2000 and 3000 Indexes, as it reflects our substantial progress over the past year in achieving our growth objectives and in building value for our shareholders."
The Russell 2000 Index is a small-cap stock market index that includes the bottom two-thirds of the Russell 3000 Index, which is an all-cap index. Inclusion in the Russell 3000 Index ensures a company's automatic placement in either the large-cap Russell 1000 Index or the small-cap Russell 2000 Index as well as the appropriate growth and value style indexes.
Russell indexes are prominent benchmarks used by investment managers and institutional investors for index funds and to guide active investment strategies. Approximately $10.5 trillion in assets were benchmarked against Russell US indexes as of the end of December 2023.
Universal Stainless & Alloy Products, founded in 1994 and based in Bridgeville, PA, specializes in manufacturing and marketing semi-finished and finished specialty steels. These products serve a diverse range of industries, notably aerospace, energy, and heavy equipment manufacturing.
The announcement is based on a press release statement and includes forward-looking information subject to risks and uncertainties, such as the company’s ability to maintain customer relationships, competitive factors, and market demand for its products. The company's performance could be affected by various factors including economic conditions, industry challenges, and operational risks.
In other recent news, Universal Stainless & Alloy Products Inc. reported a significant increase in profitability and sales in its first-quarter results, with a gross margin of 18.9% - the highest in 12 years. The company's first-quarter sales, driven primarily by the aerospace market, were the second highest in its history.
KeyBanc Capital Markets recently raised the price target for Universal Stainless shares to $36.00, citing an improvement in gross margins and a strong sales mix. The firm's analyst projects a second quarter 2024 earnings per share (EPS) of $0.52, and for the full year 2024, an upwardly revised EPS forecast of $2.20.
These developments come amidst Universal Stainless's pending acquisition of Haynes International (NASDAQ:HAYN) and the resolution of internal labor issues. The company's efforts to ramp up production levels and its potential for aggressive deleveraging were highlighted by the analyst.
Furthermore, the firm noted that each 100 basis point increase in gross margin could translate to more than $3 million in annualized EBITDA and an additional $0.25 to $0.30 in annual EPS.
Lastly, the company's portfolio, with a more aggressive transactional bias as opposed to long-term contracts, positions Universal Stainless favorably to capitalize on core market conditions. These recent developments provide an insight into the company's performance and future expectations as stated by analysts.
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