Telecom (TEL) Vs Steel & Tube Holdings (STU)

[RazorX]

Hi folks

I'm looking at possible investments ,and these two have caught my interest. I know Telecom has had some bad press lately, but aside from that which company would you recommend to invest in? Telecom or Steel & Tube holdings?

I have noticed that both are at a low point in their 5yr SP history, with TEL at 2.27 today and STU at 2.60. Both seem to pay good dividends, and both seem to be a good buy at the moment so I'm a little stuck as to which one is better - I'm not too crash hot on fundamentals so advice from you guys would be great. I was looking at a 1000 shares of either, but I could go 500 shares each to split risk, however this increases brokerage costs so...

Advice, comments, recommendations? :)

Thanks Folks

[percy]

Razor,
please do not buy either at present as both are in a down trend ,the SP being below the 180 day moving averages.Keep your powder dry. If you look at TUA thread you will read how poorly I did buying against the trend,and how much better I would have done using the trend as your friend.

[Vtrader]

Razor,
Likewise, see my comment in the STU thread. Most significant projects that use steel are currently sourcing finance, and yet to secure $. Rest assured STU will increase, our consumption of steel indicates any increase is a while away. A question I ask myself before any purchase is " can this purchase wait until tomorrow?" your motivations and beliefs will answer the question. V.

[Yankiwi]

Hi folks

I'm looking at possible investments ,and these two have caught my interest. I know Telecom has had some bad press lately, but aside from that which company would you recommend to invest in? Telecom or Steel & Tube holdings?

I have noticed that both are at a low point in their 5yr SP history, with TEL at 2.27 today and STU at 2.60. Both seem to pay good dividends, and both seem to be a good buy at the moment so I'm a little stuck as to which one is better - I'm not too crash hot on fundamentals so advice from you guys would be great. I was looking at a 1000 shares of either, but I could go 500 shares each to split risk, however this increases brokerage costs so...

Advice, comments, recommendations? :)

Thanks Folks
Hi Razor,

I am far from an expert, but I would strongly suggest STU. A simple look at the chart show pretty solid long term support at the $2.50 level. I sure Mr P. had pointed this fact out previously (maybe 6 months ago or so) on the STU thread, and it appears to have held once again in the last week or so.

I'm strongly considering re-entry myself.

[Penfold]

I bought more STU last week. Sound financials, takeover possibility, decent yield and at the bottom of a cycle.

I personally wouldn't touch TEL. Although it is a favourite of foreign investors which will come back to NZ in time.

I am buying for the long term and for yield. Others here are traders and will look at them differently. I take their point about the downtrend but if they go down further, i will just buy more.

[RazorX]

Hi folks

Thanks for the input.

Percy: true about not trading against the downtrend as I have found out in forex. However I would be going for a long term view so is the current trend as important as it is for a trader? (I can defiantly see the sense in not trading against the trend if if one is a trader)

Vtrader: What do you mean by "your motivations and beliefs will answer the question" I'll try and answer your question but I may be totally missing the point - I am loath to buy at a higher price tomorrow what I could have bought cheaper today. In other words when I see a deal I like to go for it - this is why I am interested in STU. I noticed they paid good dividends, then I researched and found that STU has, as Yankiwi and Penfold pointed out, good support at 2.50 and is in the bottom of a cycle. Is this my motivations and beliefs then?

BTW guys I can't find a STU thread anywhere in the NZX part of the forum. Am I blind or what?

Thanks again.

Razor

[percy]

hi razor
the STU chart thread is now close to this thread.. I agree with you all STU is a very well run company.I just thought the timing to buy is not right.

[Vtrader]

Vtrader: What do you mean by "your motivations and beliefs will answer the question" I'll try and answer your question but I may be totally missing the point ...

Razor,
I am suggesting that everyone has different reasons for buying and selling, and different timing for buy and sell. Yours will be different to mine, so it would not be a good look for me to tell you what to do, or when to do it. (See also you have many more posts than me...)
However, what I can offer is perspective, I am immersed to the stainless steel market, I can also observe movements at STU from my office. My construction industry knowledge suggests that volumes of steel will not be great in the near future, therefore slight stock turnover would correlate to a slight profit, which may lead to slight yield for shareholders. STU may find support at current levels, personally I will be waiting a bit longer... V.