Disclosures

Ferroglobe PLC

I, Sarkis Sherbetchyan , certify that this report reflects my personal beliefs about this company and that no portion of my compensation was, is or will be directly or indirectly related to the specific recommendations or views discussed in this report.

Disclosure

  • B. Riley & Co., LLC does and seeks to do business with companies covered in its research reports.
  • A portion of this analyst’s compensation is based on the sales, trading and investment banking activities of B. Riley & Co., LLC.
  • B. Riley & Co., LLC makes a market in the securities of the company covered in this report.
  • This company currently is, or within the past 12 months was, a client of B. Riley & Co., LLC. The services provided were Investment Banking Services.
  • B. Riley & Co., LLC, or any of its affiliates, has received compensation for investment banking services from this company in the past 12 months.
  • This report may be distributed by FBR Capital Markets & Co., an affiliate of B. Riley & Co., LLC and as such constitutes third party research. For additional information, please visit http://www.fbr.com/disclosures.
Disclosure Chart

Ratings Distribution as of June 23, 2017 % with Investment Banking Relationships
Rating Number of Companies Percent of Total
Buy 148 73.3%
Neutral 53 26.2%
Sell 1 0.5%
Total 202 100%
Ratings Distribution as of October 4, 2016 % with Investment Banking Relationships
Rating Number of Companies Percent of Total
Buy 21 95.5%
Neutral 1 4.5%
Sell 0 0.0%
Total 22 100%

Explanation of B. Riley & Co. LLC's Rating System

  • Buy: We generally expect "Buy" rated stocks to materially outperform both the S&P 500 and Russell 2000 as well as other stocks in their sector. Further, we believe that the potential reward relative to the potential risk is particularly attractive.
  • Neutral: We generally believe "Neutral" rated stocks will perform roughly in line with the S&P 500 and Russell 2000 over the intermediate and long term.
  • Sell: We generally expect "Sell" rated stocks to materially underperform both the S&P 500 and Russell 2000 as well as other stocks in their sector. Further, we believe that the potential reward relative to the potential risk is particularly unattractive.

Risks and Considerations

  • Acquisition/Integration - The Company actively evaluates potential acquisitions as part of its growth strategy. Acquisitions pursued by the Company could be dilutive to financial results and result in a difficult, dilutive or expensive integration.
  • Acquisition/Integration - The Company recently completed acquisition(s). If the Company fails to successfully integrate the acquisition, the deal may lead to disappointing returns.
  • Commodity Costs - Should commodity prices for the Company's resources increase, the Company's operating margins could be harmed.
  • Competition - The industry is highly competitive and many of the Company's competitors have greater resources.
  • Cyclical Nature of the Company's Business - Revenue from the Company's businesses have historically correlated positively with both US and world GDP. A cyclical downturn in GDP growth domestically and/or abroad may lead to a material deterioration in the Company's results.
  • Insider Ownership - Directors and executive officers collectively own a significant percentage of the Company. While this may align interest with other shareholders, investors might view a future sale by any director or officer negatively.
  • International Operations - The Company derives a significant portion of its revenues from outside the United States. The Company is subject to foreign exchange risk and the risks inherent in managing a global Company.
  • Loss of Key Personnel - In our opinion, the current management team will be instrumental in executing the Company's growth strategy. The resignation of a key member of management would have a negative impact on the Company.
  • Pricing Pressure - The Company's business could be affected by pricing pressure within the market.
  • General Industry - The Company could miss our estimates and/or their financial guidance.
  • Further Potential Risks - See the Company's SEC filings, particularly its 10-K filing, for a discussion of further potential risks.

Additional Risks and Considerations

    • Antidumping duties - Antidumping duties are currently in place covering silicon metal imports from Russia and China.  The discontinuation of such duties could have a material adverse impact on the Company's operating results.
    • Labor - The Company has a large number of full-time employees and is party to several collective bargaining agreements that cover some of these employees.
    • Raw materials prices - Increases in the costs of raw materials may not be passed on to customers with fixed contracts, which could negatively impact the Company's profitability. 
    • Silicon metal prices - The metals industry, including silicon-based metals, is cyclical and has been subject to swings in market price and demand, which could lead to volatility in the Company's revenues and may cause a material adverse impact on its operating results.