STU - Steel & Tube Holdings

**Pmdv77** · 23-08-2019, 01:01 PM

Step one of redemption acheived. Still another 99 steps to go but they could so easily have tripped up at this stage...

**Scrunch** · 23-08-2019, 10:58 PM

Originally Posted by Lease

EPS 0.068, PE ratio close to 14 based on SP 0.94. The PE is highest since 2013 as per my calculation. Given the fact STU operate in a very competitive market, I'm cautious if they can achieve $35-40m EBIT by FY21 as mentioned at 2018 AGM.

Given that 2019 was well below the their earlier estimates, $35 to $40m EBIT in FY21 looks rather unlikely. If this was Mr Markets the best guess, the share price wouldn't be where it is. The interest expenses are now low before the accounting lease adjustments ($1m?). A $37.5m EBIT result is therefore a net surplus of about $26m. If say a 12x PE was applied in two years to an EBIT of $37.5m, the 2021 share price is $1.89. People wouldn't be prepared to sell at under $1 if they believed there's a good chance of the share price doubling in the next two years.

Assuming people are pricing in a 15% capital return and some dividends from the current 92c price, the expected share price in two years is $1.22. That's a market cap of just over $200m. A range of different future PE ratios and EBIT's can create a $200m market cap, but they are typically under an EBIT of $30m.

**clearasmud** · 26-08-2019, 01:37 PM

I can't find an investor conference call recording on their website,
Can anyone help me?

**peat** · 26-08-2019, 03:38 PM

Originally Posted by clearasmud

I can't find an investor conference call recording on their website,
Can anyone help me?

Im not certain, but it looks to me as if there is only an online archive of the presentation (i.e. powerpoint slides) , not a recording of the live actual investor conference call.
If you cant find it after more looking give the company an email or a phone call.

**clearasmud** · 26-08-2019, 05:09 PM

Thanks for your help Peat.

**Independent Observer AUNZ** · 03-09-2019, 09:20 AM

Originally Posted by clearasmud

Thanks for your help Peat.

Did you have any luck though? I need to review my position here, its such a mixed bag and hard to cut the wheat from the chaff.

**clearasmud** · 04-09-2019, 02:33 AM

Not yet.
Let us know if you do.

**trader_jackson** · 09-09-2019, 10:15 AM

https://www.nzherald.co.nz/business/...ectid=12265951

Intriguing isn't it

**Snoopy** · 09-09-2019, 08:55 PM

Originally Posted by trader_jackson

https://www.nzherald.co.nz/business/...ectid=12265951

Intriguing isn't it

Many moons ago I was a Steel and Tube shareholder. I sold out as part of portfolio rationalisation, as it was only a small position. I was also a shareholder in the majority shareholder at the time, which was Australia's 'Arrium'. Steel and Tube had historically performed quite well. But the equivalent Australian steel distribution business also run by Arrium has never had the same margins. This is what stopped me stepping back into Steel & Tube again, as I felt that the NZ business was in danger of slipping back into a permanent state of being no more profitable than the Australian operation. Perhaps this has now happened?

SNOOPY