The way you guys are talking this thing is simply a license to print money. If it weren't for the fact that the ol wily hound knows that cyclical companies tend to trade at a very low PE of about 7 at the peak of the cycle I might be tempted to really jump in boots and all. Looks like a pretty good punt, (make hay while the sun shines), until the chart turns is how I would characterize this opportunity.
A very old nag that seems to be performing well on the current firm track conditions but what if the track turns a bit softer ? Could say the same about another company that sells shiny metal things, MHJ. Its all good when there's massive sector tailwinds but down the track when conditions change...
Last edited by Beagle; 03-01-2022 at 10:01 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Beagle makes some good points. It is easy to get carried away and suggest anyone with doubts don’t invest it’s that’s simple.
I don’t view this as a cyclical short term opportunity. I worked in the industry for a long time including at STU and see this as a turnaround storey. The building industry has been boyant for years. What Mark has done has taken out large costs, simplified the business, changed the focus to margin and most importantly by all accounts placing value on staff.
Like Rak and Skt I have researched this company in detail and see great value. There is no justification for STU to trade at such low multiples compared to Vulcan. At every level I look at Stu is way way undervalued which is why I have backed the truck up and have a substantial holding, more than the CEO.
Beagle makes some good points. It is easy to get carried away and suggest anyone with doubts don’t invest it’s that’s simple.
I don’t view this as a cyclical short term opportunity. I worked in the industry for a long time including at STU and see this as a turnaround storey. The building industry has been boyant for years. What Mark has done has taken out large costs, simplified the business, changed the focus to margin and most importantly by all accounts placing value on staff.
Like Rak and Skt I have researched this company in detail and see great value. There is no justification for STU to trade at such low multiples compared to Vulcan. At every level I look at Stu is way way undervalued which is why I have backed the truck up and have a substantial holding, more than the CEO.
Fair enough
I might say ‘I have researched OCA in great detail and see great value. There is no justification for OCA to trade at such low multiples compared to Summerset’
Fact is that is how the market sees things ….sometimes it’s not fair is it
But one day both OCA and STU will be market darlings
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
At times I think of MFT and EBO.MFT was "just another" trucking business.EBO was a "very simple" medical supply business.
Neither business had a moat.Any one could have set up a business in competition to them.
So why were they successful.?
MFT the answer was Bruce Plested and Neil Graham.
EBO the answer was Mark Waller and major shareholder Peter Krauss.
Are either of the above cyclical.?
I would guess you could say MFT is/was.
Yet my view is a well managed business will adapt to changing conditions.OK some years may be more profitable than others,but over a 5 year period the business will enjoy solid growth.Over 20 to 30 year incredible growth.
STU was a very good business ,that lost its way.It lost focus and grew fat and lazy.
Today it appears to be well directed/managed,with a good balance sheet, in a reliable sector.
Putting capital into fast moving stock items with the world's current logistic problems makes sense to me for two reasons.1] you only make a profit when you sell something,and 2] you gain market share [customers]when others are out of stock.
It looks to me management are on top of market/sector requirements,so I bought STU with the view of never selling.Should results warrant it I will add to my holding.
Putting capital into fast moving stock items with the world's current logistic problems makes sense to me for two reasons.1] you only make a profit when you sell something,and 2] you gain market share [customers]when others are out of stock...........
That's spot on percy
H121 EBIT margin was 3.4% of sales - that improved to 4.5% in H221
Pretty impressive and proof things going the right direction
But H222 (half just finished) the guidance of $22m EBIT is going to be an EBIT margin of about 8%
Things are looking better as time goes on
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Big headlines and story in Herald Big Leap in KiwiRail's $100,000-plus earners fuel claim executive pay at the SOE 'out of control...... all rather dramatic
Had a look at STU numbers
in FY21 108 staff >$100k ,,,,,DOWN from 114 in FY20
Love it - doing heaps more with a little less
Last edited by winner69; 04-01-2022 at 03:14 PM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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