STU - Steel & Tube Holdings

[Poet]

$2 per share around Christmas 2025, how would this sound?

Works for me!

[winner (n)]

Steel and Tube forecasts steep fall in year-on-year earnings

https://www.rnz.co.nz/news/business/504458/steel-and-tube-forecasts-steep-fall-in-year-on-year-earnings

No worries as long as Customer Satisfaction and Employee Survey score keep improving

[BlackPeter]

Steel and Tube forecasts steep fall in year-on-year earnings

https://www.rnz.co.nz/news/business/504458/steel-and-tube-forecasts-steep-fall-in-year-on-year-earnings

No worries as long as Customer Satisfaction and Employee Survey score keep improving

You mean RNZ is just regurgitating last weeks news without even putting it properly into context (like property bottom and uncertainty due to elections)? Pity, there was a time when I thought that they are the only radio station still worthwhile listening to in NZ. Maybe I was a bit too optimistic .

[winner (n)]

STU share price holding up in spite of that dismal update a month ago

No doubt all the talk of billions of upcoming infrastructure spend and a resurgence in building activity is giving punters hope

However my industry experience is that talk like that is just that .....it often doesn't lead to boom times. NZ notorious for being useless at actually doing things (construction wise) over and above the norm. Post Chch quakes took years for work to be done and then it took resources from other areas/regions so nationally no big boom. Same post Kaikoura quakes and what happen with all those shovel ready things of a few years ago.

At best over the next few years the likes of STU, FBU can look to steady/flat market activity

But then Peter says STU share price $2 sometime ....maybe he knows more than me

[LoungeLizard]

STU share price holding up in spite of that dismal update a month ago

No doubt all the talk of billions of upcoming infrastructure spend and a resurgence in building activity is giving punters hope

However my industry experience is that talk like that is just that .....it often doesn't lead to boom times. NZ notorious for being useless at actually doing things (construction wise) over and above the norm. Post Chch quakes took years for work to be done and then it took resources from other areas/regions so nationally no big boom. Same post Kaikoura quakes and what happen with all those shovel ready things of a few years ago.

At best over the next few years the likes of STU, FBU can look to steady/flat market activity

But then Peter says STU share price $2 sometime ....maybe he knows more than me

One way or another - planned or unplanned - $billions will be spent on infrastructure. One bridge built on SH25 in the Coromandel cost $40m but replaced a large stretch of demolished roading which cut off entire communities for ages. The cost to the country in lost productivity, compensation claims and insurance would have been far more than $40m. And that was just one climate event impacting one road. So the money WILL be spent whether we like it or not.

 The macro environment is turning in STU's favour again - it is, after all a cyclical stock - and I see sustained growth ahead. (NZ Govt has budgeted infrastructure spend of $71b over the next 5 years). Management seem to have got their act together and they have a very solid balance sheet to work with. And the yield is conservatively still going to be 7-8% at the current SP.

 A lot to like, I feel.
 

[Basil]

Roads around the wider Titirangi Auckland area are still a mess a year on from the massive deluges of last summer. Might be fixed sometime this decade. Best chance of $2 is if FBU improve their takeover offer of $1.90 from many years ago but then I am sure the directors in their infinite wisdom would say that undervalues the company again lol

[winner (n)]

Came across this the other day......had seen similar wisdom in the past but it was a good reminder of how I feel about a few companies and STU is one of those.

"In the absence of a track record of accomplishment, you should take a CEO's plans as hopeful intent. That doesn't mean they are lying, just that we really don't necessarily know what they can or cannot do. There is a particular danger if they use language that resonates with you. More than once in my investment career did I fall for someone who said all the right things, except that they hadn't done them — in the past, or as it turned out, in the future."

[Basil]

Used to live next to Glen Eden primary school in west Auckland as a young man.  Their school motto was "Facta non verba" "Deeds not words"

[Ferg]

Used to live next to Glen Eden primary school in west Auckland as a young man.  Their school motto was "Facta non verba" "Deeds not words"

Nice one.  We call it "less hui, more do-ey"

[Shareguy]

No question things are tuff out there with volumes well down across the industry. Spoke to a large truck body manufacturer/engineer who has after several years of massive workloads started to run out of work.

However share price holding up over the dollar mark which is good.

Fbar say further inventory reductions (-NZ$3.7m to NZ$135.5m as at November 2023) and solid cash conversion (NZ$6.9m of operating cash generation over five months of 2023) lifted STU's cash balance to NZ$17.1m or 10cps.

While the 1H24 DPS (FBAR estimate 3.5cps) will consume some of this cash, STU's balance sheet remains well positioned given the softer demand backdrop. Along with STU's NZ$100m undrawn banking facility, this provides headroom to pursue bolt-on acquisitions and/or other capital management initiatives.

STU has an exceptional balance sheet with a bright future in my opinion.

A steel for some company...... only question in my mind is when..

[Poet]

No question things are tuff out there with volumes well down across the industry. Spoke to a large truck body manufacturer/engineer who has after several years of massive workloads started to run out of work.

However share price holding up over the dollar mark which is good.

Fbar say further inventory reductions (-NZ$3.7m to NZ$135.5m as at November 2023) and solid cash conversion (NZ$6.9m of operating cash generation over five months of 2023) lifted STU's cash balance to NZ$17.1m or 10cps.

While the 1H24 DPS (FBAR estimate 3.5cps) will consume some of this cash, STU's balance sheet remains well positioned given the softer demand backdrop. Along with STU's NZ$100m undrawn banking facility, this provides headroom to pursue bolt-on acquisitions and/or other capital management initiatives.

STU has an exceptional balance sheet with a bright future in my opinion.

A steel for some company...... only question in my mind is when..

Yes exactly - a steel for a competitor to buy. Current Shareprice is only slightly above cash plus inventory

[winner (n)]

One thing that STU aren't very clear about is what revenues/profits acquisitions are actually bringing in .....many positive loose read between the lines statements

Why I'd like to know is so I assess growth of underlying business ....ie total revenue = underlying business plus acquisitions.

Like if you backed Fasteners NZ, Kiwi Pipes ans aluminium contributions what would business be like.

At a total level can't really say STU is growing that fast.

Back of mind is that their history around acquisitions is a bit chequered ...have things changed?

[Shareguy]

Fbar forecast note says it's all good from here.

2025F divi of 8.5cps fully imputed. I'm picking share buy back coming.

Mark will be very concerned for his job with this low share price, especially when the vultures start circling.

Both Craigs and Fbar are picking an increase in M&A this year with interest rates on the decline and our low NZ dollar.

[winner (n)]

Fbar forecast note says it's all good from here.

2025F divi of 8.5cps fully imputed. I'm picking share buy back coming.

Mark will be very concerned for his job with this low share price, especially when the vultures start circling.

Both Craigs and Fbar are picking an increase in M&A this year with interest rates on the decline and our low NZ dollar.

Suppose Forbar one of brokers whose guru analysts have a target range of 120 to 132

Probably same analysts who not along had targets of 170 plus minus a bit

Might get it right one day

[Shareguy]

Suppose Forbar one of brokers whose guru analysts have a target range of 120 to 132

Probably same analysts who not along had targets of 170 plus minus a bit

Might get it right one day

Fbar have a target price of $1.20 currently. Yes they change all the time as conditions change. They may be right or wrong. The market of course will have its own opinion on what a share is worth.