STU - Steel & Tube Holdings

[Balance]

What's happened to the ebit target of $40m they were going to achieve by now?

That's to come and the sp will be $2.50 then.

I have no issue with STU's EBIT margin of 4% at this stage of their turnaround - takes time to rebuild and FBU's 10% is an excellent target in the meantime to shoot for and deliver EBIT of $48m.

Current sp means STU is trading on EBITDA multiple of 4.25X and Enterprise multiple of 8.5X - cheap stock given turnaround just bearing fruit and company is in an oligopolistic industry.

That dog FBU has ebit margin approaching 10%

Much better than STU's woeful 4%

FBU ain't no dog, W69 - been a stellar performer for some of us who bought in last year.

[Balance]

Looking at consensus forecasts from 3 brokers' covering the stock, STU has delivered in F21 the consensus forecast of F22.

[Entrep]

Well someone is not impressed

CleanShot 2021-08-24 at 10.07.29.png

[macduffy]

I'm happy to hold but like Poet, wouldn't want to see STU acquiring anything at this stage. Just manage the business without complications for a couple of years.

[777]

Well someone is not impressed

CleanShot 2021-08-24 at 10.07.29.png

Well it is not someone. There are 6 sellers.

[artemis]

I'm happy to hold but like Poet, wouldn't want to see STU acquiring anything at this stage. Just manage the business without complications for a couple of years.

Good comment, but they have funds to step in for a bargain. Which BTW STU was last lockdown.

[sb9]

Few points of note from investor call:

- Capital management in the form of buy back or special divvy being considered, but very early days for that

- Price increases put through from Sep onwards

- Staff on full pay during current lockdown and applying for wage subsidy

- Impact of lockdown not material as it just shifts demand further out as seen from last year

- All in all good progress across the board and positive outlook.

[Balance]

Few points of note from investor call:

- Capital management in the form of buy back or special divvy being considered, but very early days for that

- Price increases put through from Sep onwards

- Staff on full pay during current lockdown and applying for wage subsidy

- Impact of lockdown not material as it just shifts demand further out as seen from last year

- All in all good progress across the board and positive outlook.

Thanks for that, sb9.

[Snow Leopard]

Good: NTA
Pretty Reasonable: Cash Flow
Poor: Profitability
Really Poor: Wasting money on Unimputed Dividend.

They better deliver on the improvements going forward.

[Arbroath]

[QUOTE=Snow Leopard;903025]Good: NTA
Pretty Reasonable: Cash Flow
Poor: Profitability
Really Poor: Wasting money on Unimputed Dividend.


I don't disagree that the profitability is sub-optimal but ex-cash they are selling for 10x earnings and it is likely that FY22 will see a further improvement in earnings though this is not guaranteed given their patchy record in recent years.

No debt, nearly half a billion of revenues and $30m+ operating cashflow....I hold at around $1.25 average and think they are worth $2.00+ if they can execute well in the next 12-18 months. Dividends should become at least partially imputed again in FY22 also.