MRC Global's Growth Prospects Bright Despite Macro Risks

On Jun 7, 2016, we issued an updated research report on MRC Global Inc. (NYSE:MRC) .

Scopes of Improvement

MRC Global offers premium quality products for the upstream, midstream and downstream markets on the back of its advanced technologies. The company often enters into agreements with leading energy firms to furher to improve its business. Moreover, MRC Global intends to boost near-term revenues and margins through organic as well as inorganic growth initiatives. Also, the company continues to make diligent efforts to improve its financial performance via effective cost reduction and capital deployment strategies. Through these initiatives, the company strives to make its businesses more profitable, expand market share, lower debt burden and enhance operating cash in the near term.

Headwinds

Reduced consumer spending, weak demand from transmission customers, soft sales in the Australian, Singaporean and European business hubs and a stronger U.S. dollar are currently weighing over MRC Global’s top line. Also, the company’s revenues and margins are highly sensitive to steel price and supply fluctuations. We expect the declining steel prices to significantly lower the company's revenues, gross profit as well as cash flow in the quarters ahead. Stiff competition exposes the company to risks of market share loss. Moreover, the persistent weakness in oil prices have resulted in lower investments in the energy sector, whch in turn, has been adversely affecting the company's sales volume.

Other Stocks to Consider

MRC Global presently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Synalloy Corporation (NASDAQ:SYNL) , First Majestic Silver Corp. (NYSE:AG) and AgroFresh Solutions, Inc. (NYSE:AG) . All the three stocks currently hold a Zacks Rank #2 (Buy).

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