Fund Manager Summary on Sims Ltd (ASX:SGM)
Sims Ltd (ASX:SGM) has garnered positive attention from fund managers, particularly due to its strong performance and strategic focus on margin over scrap volumes, as highlighted in recent reports. The company reported an underlying EBIT of $73 million, reflecting a significant 184% year-on-year increase, driven by improved margins, especially in the US where it stands to benefit from steel tariffs. Fund managers emphasize that Sims' majority US exposure positions it well for future demand, particularly in electric arc furnace applications that utilize scrap for lower-emission steel production. However, they note market pressures, including fluctuations in scrap steel prices and competition in the recycling sector, warrant careful monitoring. Overall, the consensus supports an overweight position as the company's operational strategies and favorable market conditions create a solid investment outlook.
Commentary From The Managers
There are 5 insights from 3 fund managers regarding their investment in Sims Ltd (ASX:SGM) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Eley Griffiths Group
29 Dec 2025
$18.01
Summary
- Eley Griffiths Group continues to hold an investment in Sims Ltd due to its potential in the metal recycling sector.
- Improved copper prices are positively impacting scrap prices, enhancing profitability for Sims.
- The company's e-waste business is beginning to show significant growth and potential.
- Overall, Eley Griffiths Group sees Sims as a strategic play in the recycling market.
Yarra Capital Management
31 Oct 2025
$15.96
Summary
- Sims Ltd (SGM) continues to be an overweight position for Yarra Capital Management.
- The company outperformed during the month, supported by a 2.3% increase in Turkish scrap steel prices.
- Yarra Capital Management believes the company’s majority US exposure positions it well to benefit from steel tariffs.
- The focus on margin over volumes is yielding solid results for the company.
- There is long-term upside potential for scrap demand, particularly due to its use in lower emissions Electric Arc Furnace steel making operations.
Maple-Brown Abbott
31 Mar 2025
$14.63
Summary
- Sims Ltd's position increased by 24%
- Share price supported by potential benefits from US tariffs on steel imports
- Solid half-year results reflect improvement in US scrap margins
- Acquisition of US competitor Radius Recycling by Toyota Group signals positive sentiment in the sector
- Maple-Brown Abbott continues to hold their position in Sims Ltd
Yarra Capital Management
31 Mar 2025
$14.63
Summary
- Sims Limited (SGM) outperformed following half-year results.
- Reported underlying EBIT of $73 million, a 184% increase compared to previous period.
- Improved margins in North America drove financial results.
- Yarra Capital Management views results as supportive of SGM’s strategy focusing on margin over scrap volumes.
- Maintaining an overweight position due to majority US exposure benefitting from steel tariffs.
- Long-term upside anticipated for scrap demand linked to lower emissions Electric Arc Furnace steelmaking.
Yarra Capital Management
30 June 2024
$10.20
Summary
- Yarra Capital Management highlights that Sims Ltd (SGM) has underperformed following a disappointing operational update.
- The company anticipates reporting an underlying 2H EBIT that is marginally lower than 1HFY24.
- The near-term outlook for SGM is challenging due to ongoing over-production of steel by China.
- Despite current difficulties, SGM is trading well below NTA.
- Evidence suggests that North America (NAM) is beginning to show signs of recovery.
- Given these factors, Yarra Capital Management is pleased to maintain its overweight position in SGM.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Sims Ltd (ASX:SGM)?
Fund managers including Maple-Brown Abbott, Yarra Capital Management and Eley Griffiths Group have invested in Sims Ltd (ASX:SGM).
Why do fund managers invest in Sims Ltd?
Fund managers invest in Sims Ltd due to its strong financial performance and favorable market conditions. The company reported significant growth, with a 184% increase in underlying EBIT driven by improved margins in North America. Its majority exposure to the US market positions it to benefit from steel tariffs. Furthermore, Sims focuses on margin improvement rather than volume, enhancing its profitability. The rising demand for scrap metal, particularly for lower emissions steel production, also supports long-term growth prospects.
What happened to Sims Ltd (ASX:SGM)?
Fund managers are investing in Sims Ltd due to its strong performance driven by rising Turkish scrap steel prices and favorable US market conditions, particularly regarding steel tariffs. The company's strategic focus on margin over volume is yielding positive results, while increasing demand for scrap metal in lower emissions steelmaking processes offers long-term growth potential. Additionally, with improving copper prices boosting scrap values and the growth of Sims' e-waste business, the company is well-positioned for future success.
What is the short interest in Sims Ltd (ASX:SGM)?
The short interest in Sims Ltd (ASX:SGM) is 2.83% which makes it the 84th most shorted stock on the ASX. Of the 193.2M shares that Sims Ltd has on issue, 5.5M have been sold short.
What does Sims Ltd (ASX:SGM) do?
Sims Ltd. engages in the recycling of metal and electronics. It operates through the following segments: North America Metals (NAM), Australia, New Zealand Metals (ANZ), UK Metal (UK), Global Trading, Investment in SA Recycling (SAR), Sims Lifecycle Services (SLS), and Unallocated. The NAM segment consists of subsidiaries and joint ventures in the U.S. and Canada, which perform ferrous and non-ferrous secondary recycling functions. The ANZ segment includes subsidiaries and joint arrangements in Australia, New Zealand, and Papua New Guinea, which perform ferrous and non-ferrous secondary recycling functions. The UK segment consists of subsidiaries in the United Kingdom, which perform ferrous and non-ferrous secondary recycling functions. The Global Trading segment consists of the group’s ferrous and non-ferrous marketing subsidiaries that coordinate sales of ferrous bulk cargo shipments, non-ferrous sales into primarily China and Southeast Asia, and brokerage sales on behalf of third and related parties. The SAR segment consists of the group’s share of results from its investment in the SA Recycling joint venture. The SLS segment consists of subsidiaries, which provide electronic recycling solutions in the following countries: Australia, Germany, India, Ireland, Netherlands, New Zealand, Poland, Singapore, the United Kingdom, and the United States of America. The Unallocated segment contains unallocated corporate costs, interests in a joint venture in Australia, Sims Municipal Recycling, and Global Sustainability Insurance Corporation. The company was founded by Albert George Sims in 1917 and is headquartered in Mascot, Australia.