STU - Steel & Tube Holdings

[Jantar]

Ah. True.
So it could all come back to whether STU's own testing gave the correct results or not.

[blackcap]

Ah. True.
So it could all come back to whether STU's own testing gave the correct results or not.

With all the negativity that has been going on the last few months with the class action talk and bad steel talk etc its a bit surprising to me that this is solidly bid at 2.53 after being 1.90 odd just 6 months ago. How is the squiggly line looking on this one winner?

Im a bit confused, I have a few of these but thought the class action was also aimed at STU (re their press release) so that would be bad for STU or am I not getting something here....

[Mista_Trix]

I'm up 30%, which is quite shocking on a company I got into for the div.

I don't think the class action will get any legs to be honest. STU have been pretty transparent and front footed with their commentary around the subject.

[Jantar]

.....
Im a bit confused, I have a few of these but thought the class action was also aimed at STU (re their press release) so that would be bad for STU or am I not getting something here....

My understanding is that the class action is aimed at STU and others, but that the claims against STU are unlikely to succeed. The STU steel did meet the specifications, but after the testing lab was changed, the earlier testing lab's logo had been left on the specification data. The commerce commission are prosecuting on that basis, and the class action is following the CC prosecution.

It is notable that MBIE, that administers the standards, are not prosecuting, and that STU's own tests show that the steel did meet spec. On that basis any class action would have to show that the steel did not meet spec.

[blackcap]

My understanding is that the class action is aimed at STU and others, but that the claims against STU are unlikely to succeed. The STU steel did meet the specifications, but after the testing lab was changed, the earlier testing lab's logo had been left on the specification data. The commerce commission are prosecuting on that basis, and the class action is following the CC prosecution.

It is notable that MBIE, that administers the standards, are not prosecuting, and that STU's own tests show that the steel did meet spec. On that basis any class action would have to show that the steel did not meet spec.

Thanks Jantar, and Mista Trix, that makes sense. I got the feeling that STU were up fronting so that is good. Yeah I am in for the huge 10% plus imputed dividend so any capital gain is just cream on the top. Will keep my eyes open for what eventuates...

[artemis]

My understanding is that the class action is aimed at STU and others, but that the claims against STU are unlikely to succeed. The STU steel did meet the specifications, but after the testing lab was changed, the earlier testing lab's logo had been left on the specification data. The commerce commission are prosecuting on that basis, and the class action is following the CC prosecution.

It is notable that MBIE, that administers the standards, are not prosecuting, and that STU's own tests show that the steel did meet spec. On that basis any class action would have to show that the steel did not meet spec.

Agree. There is no real downside for the class action to include STU. In my admittedly very limited experience class actions cast a wide net initially then drop actions if an issue does not look like a go. The class action holds all the cards, up until the hearing anyway.

[Hoop]

From the company reports over the years, they say steel prices affects STU bottom line

The chart below is a long term snapshot of STU..What a long term chart shows is STU's downtrend has been over 12 years, a lot longer than one would have thought as the 18month uptrend (2013 -2015) was considered long...STU is in a cyclical industry so that 18 month uptrend can be seen on the chart as a failed cyclical rally (cut off at the knees). The cause amongst other things could be the failure of a decent steel price rally and unexpected period (2010 - 2012) of global economic weakness..

The primary driver of Cyclical behaviour is the state of its market's economy...the other (secondary) drivers are cost of it's products (also cyclical) and amount of competitors in that same market (profit margin effect)

As I keep on hearing the management blaming the steel prices in restricting STU performance I added the Steel price indicator to the chart so to give an "eye" visual to determine what sort of correlation Steel prices have on the STU shareprice..Recently the steel prices (although still low) have rocketed upwards by 300%..STU has some resilence built in now..quote "When coupled with a relatively robust domestic economy, we are optimistic that we’ll see a stronger performance from the business in our next trading year.”

This may explain a poor Steel/Shareprice correlation back in 2010-2011 when the Global + NZ economy suffered a weak period with STU having many competitors (margin pressures).

STU price of the time of this posting $2.61 up 8 (+3.2%)

DISC: Hoop has STU shares

[winner69]

Good post Hoop

Steel prices do impact margins but I get the impression that they use it to hide / gloss over deeper underlying performance

Using Ready Mix Concrete production as a proxy for building activity (after all where concrete goes steel goes) STU have really missed the boat in the latest building boom.

Did very well in the building boom in the 00's ....but missed out the last 5 to 6 years

Chart below shows by how much

At least punters are now seeing some action ....... but I would be worried as all the signs are that the peak of the recent boom has or will soon be reached. Can steel prices mitigate a down turn in demand and maintain profitability?

Yes Hoop - a real cyclical

You in for a quick buck I hope - no long term investment?

[winner69]

Hoop - again your charts stuffs up my view of this thread - goes off the page

I'll cope

[trader_jackson]

I was really hoping to get in on STU a few weeks back (well when it was around the low $2.40's, which was only recently)... just had to get some cash together, but it also seems like Mr Market had a similar idea... likely Mr Market is expecting favorable results (which will be annouced just after mid Feb probably), like I am.