STU - Steel & Tube Holdings

[winner (n)]

1st half volumes down 2.8% (high selling prices saw sales up 11.8%)

2nd half volumes expected to down about 15%

That's some turnaround and the question is how long will any decline last

[Shareguy]

So bugger all debt. Great cashflow. Trading well below NTA.

Mark says shares undervalued.  I agree and added to my position

[Teitei]

So bugger all debt. Great cashflow. Trading well below NTA.

Mark says shares undervalued.  I agree and added to my position

If he believes that, must be time for a share buyback when debt situation turns to cash position.

Will Mark deliver?

[BlackPeter]

If he believes that, must be time for a share buyback when debt situation turns to cash position.

Will Mark deliver?

Wouldn't this be the job of the board? I would not want to see CEO's worrying abut managing the share price - their job is to manage the performance of the company!

[winner (n)]

Has anybody done any sums as to whether STU has been a profitable hold over say 3 or 5 year periods (or even longer) ......inc dividends

Probably be a bit like an analysis I did on WHS total returns .........in last 20 years only a few times holding for 5 years given decent returns over extended periods.

Need to pick the times when share price is really cheap .......maybe now is one of this times for STU .....even Mark says it cheap

Got to love when CEO says shares are undervalued........deflects attention away from less than good company performance.

Best rave about undervalued share prices were the Turners guys a few years ago who kept on about the low share price and said it's worth $3.30 something and we are buying up ......

[Basil]

Turners guys have been proven correct though over time.
I'm with you that whenever a company says its shares are cheap, be very cautious.
Brave move Shareguy, much braver than I am prepared to be leading into a protracted recession that's absolutely hammering that sector.  Hope it works out for you mate.

[Shareguy]

Turners guys have been proven correct though over time.
I'm with you that whenever a company says its shares are cheap, be very cautious.
Brave move Shareguy, much braver than I am prepared to be leading into a protracted recession that's absolutely hammering that sector.  Hope it works out for you mate.

Yes me to Basil. Will be a good dividend while I wait for either a take over or improved performance.  Can't see much risk to the downside from here.

[Crackity]

Has anybody done any sums as to whether STU has been a profitable hold over say 3 or 5 year periods (or even longer) ......inc dividends

Probably be a bit like an analysis I did on WHS total returns .........in last 20 years only a few times holding for 5 years given decent returns over extended periods.

Need to pick the times when share price is really cheap .......maybe now is one of this times for STU .....even Mark says it cheap

Got to love when CEO says shares are undervalued........deflects attention away from less than good company performance.

Best rave about undervalued share prices were the Turners guys a few years ago who kept on about the low share price and said it's worth $3.30 something and we are buying up ......

I think I could take money off Mark Malpass in poker - probabl not against Grant Baker

[Shareguy]

Craig' says its a sell, in latest note.

 FY23 guidance below market expectations, down to underweight
STU has issued its FY23 earnings guidance for the first time, based on
10-months of operations, signalling a full year performance below market
expectations. Management is forecasting normalised EBIT of between $28m
and $32m (-23% below pre-announcement CIPe $39m/-26% below consensus
$40m, at the mid-point) and normalised EBITDA of between $48m and $52m
(-15% below CIPe $59m/-16% below consensus $60m). The company has
pointed to higher input prices and cost pressures impacting margins with it
now focusing on a cost out programme in FY24 (-$5m), whilst 2H23 sales
volumes are expected to be 10-15% down on 1H23, as the recessionary
economic cycle kicks in. We update our forecasts to determine a revised
Target Price of $0.90 (avg of DCF-based TP of $1.14 and PER-based TP of
$0.65), previously $1.33. Given the potential 15% downside to STU's current
share price (last close $1.05), we downgrade our recommendation from
Neutral to Underweight

[winner (n)]

From above ' We update our forecasts to determine a revised Target Price of $0.90 (avg of DCF-based TP of $1.14 andPER-based TP of$0.65), previously $1.33'

Jeez ....most punters like PE ratios and Craig's say it's worth 65 cents on that basis. Even Basil not that gloomy

Just as well use a blended basis to come up with their target price .......even so going from $1.33 to 90 cents is pretty dramatic

[Teitei]

From above ' We update our forecasts to determine a revised Target Price of $0.90 (avg of DCF-based TP of $1.14 andPER-based TP of$0.65), previously $1.33'

Jeez ....most punters like PE ratios and Craig's say it's worth 65 cents on that basis. Even Basil not that gloomy

Just as well use a blended basis to come up with their target price .......even so going from $1.33 to 90 cents is pretty dramatic

Remind me but were Craigs not wildly out with their forecasts and sp target in the last 3 years with STU?

[winner (n)]

Craig's have added STU to their bakers dozen. (stocks most likely to perform short term).

For teitei ........From the other day shareguy posted this

Apparently they were way too conservative with their F22 forecasts (actual was lot higher than fast) and obviously a bit too optimistic this time around.

[Basil]

Craig' says its a sell, in latest note.

 FY23 guidance below market expectations, down to underweight
STU has issued its FY23 earnings guidance for the first time, based on
10-months of operations, signalling a full year performance below market
expectations. Management is forecasting normalised EBIT of between $28m
and $32m (-23% below pre-announcement CIPe $39m/-26% below consensus
$40m, at the mid-point) and normalised EBITDA of between $48m and $52m
(-15% below CIPe $59m/-16% below consensus $60m). The company has
pointed to higher input prices and cost pressures impacting margins with it
now focusing on a cost out programme in FY24 (-$5m), whilst 2H23 sales
volumes are expected to be 10-15% down on 1H23, as the recessionary
economic cycle kicks in. We update our forecasts to determine a revised
Target Price of $0.90 (avg of DCF-based TP of $1.14 and PER-based TP of
$0.65), previously $1.33. Given the potential 15% downside to STU's current
share price (last close $1.05), we downgrade our recommendation from
Neutral to Underweight

Thanks for sharing.  So target price 90 cents 12 months hence, and I suggested 86 cents yesterday as fair value now, pretty much the same.  I think the risks in this economy in the construction sector are to the downside which is why I'd personally want a margin of safety below fair value, say 75 cents to get me interested as well as TA support.  I know I don't want "much" to get back on board lol, but that's what getting bitten does to you, once bitten, twice shy.

[lorraina]

Interesting Craigs target price is 90 cents,while Jarden's is $1.27.

Disc.I have sold.

[BlackPeter]

Remind me but were Craigs not wildly out with their forecasts and sp target in the last 3 years with STU?

Good point, but remember the golden rule: Only use analyst forecasts if they suit your tale. Otherwise - just disregard.