The beneficiaries of inflation are companies that produce commodities -- everything from steel to oil to gold. In an inflationary environment, they can command increased prices for their hard assets.
Reliance Steel & Aluminum Co. is one of the commodity producers that may emerge as winners.
Reliance Steel, based in Los Angeles, processes and distributes steel, aluminum and other metals. The company may be able to expand its profit margins in an environment of higher metals prices. Its operating margin was 4.7 percent in 2009.
Reliance has $350 million in bonds maturing in 2016 and an additional $250 million maturing in 2036, so it may benefit from being able to pay bondholders back with cheaper dollars as the years pass. It also has some bank debt that is due sooner, but could perhaps be restructured for longer maturity.
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