Steel Stock Up 47% in a Year and This Fund Just Walked Away From a $6.5 Million Position

Kawa Capital Management sold out its entire position in Gerdau S.A. (NYSE:GGB), according to a January 21 SEC filing, with an estimated transaction value of $6.49 million based on the last-disclosed value.

What happened

According to a filing with the Securities and Exchange Commission dated January 21, Kawa Capital Management sold all of its 2,094,404 shares of Gerdau S.A. during the fourth quarter. The estimated transaction value was $6.49 million.

What else to know

This was a full liquidation of a previously significant holding, reducing Gerdau S.A. exposure from 11.8% of 13F AUM to 0%.

Top holdings after the filing:

• NYSE:BDN: $15.73 million (36.4% of AUM)
• NYSE:ONL: $12.54 million (29.0% of AUM)
• NYSE:ARE: $7.93 million (18.3% of AUM)
• NYSE:VALE: $7.05 million (16.3% of AUM)

As of January 20, Gerdau S.A. shares were priced at $4.16, up 47.0% over the past year and vastly outperforming the S&P 500’s 14% gain in the same period.

Company overview

Company snapshot

• Gerdau offers a broad portfolio of steel products, including semi-finished billets and blooms, long rolled products, special steels, flat products, and iron ore.
• The company operates a vertically integrated business model encompassing steel production, mining, and distribution, generating revenue from direct sales, distributors, and a retail network across the Americas.
• It serves construction, manufacturing, automotive, agricultural, oil and gas, wind energy, and infrastructure sectors, targeting both industrial clients and resellers.

Gerdau S.A. is a leading steel producer in the Americas, with a diversified product offering and an extensive distribution network. The company leverages its integrated operations and broad geographic reach to serve a wide range of industrial and infrastructure customers. Its scale, product diversity, and established presence in key markets support its competitive positioning within the global steel industry.

What this transaction means for investors

Gerdau has been a quiet winner over the past year, with shares up roughly 47% as pricing discipline, resilient North American demand, and a streamlined cost structure lifted results. That kind of performance naturally changes the risk math for concentrated portfolios.

In its most recent earnings update, the company highlighted steady cash generation and continued capital returns, including dividends and buybacks, even as steel markets normalized from earlier peaks. Management emphasized balance sheet strength and flexibility, pointing to disciplined capex and a focus on higher margin products tied to infrastructure and industrial demand. Those are real positives for long-term investors looking at durability rather than spot pricing.

But context matters. This position previously represented nearly 12% of the fund’s reportable assets, making it an outsized exposure relative to the rest of the portfolio, which now leans heavily into real estate and diversified materials names like Vale. Fully exiting after a sharp rally suggests portfolio construction and risk management may be driving the decision as much as fundamentals.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alexandria Real Estate Equities. The Motley Fool has a disclosure policy.