The company booked a $4 million comprehensive income in Q2 FY23 thanks to a prudent hedging strategy and the strong performance of its tubular division.
With HRC steel prices falling, inventories and receivables declined significantly, which pushed the CFO for the quarter to $76 million.
The net debt is now just $29.7 million, and I expect it to decrease further in Q3 FY23 as the CFO should benefit from another decrease in HRC steel prices.
In my view, Friedman Industries is significantly undervalued, as it’s trading at a P/TBV ratio of just 0.6x.
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Trade & Pricing: Europe's billet market trend 2024-2025
