-
18-12-2020, 10:05 PM
#941
 Originally Posted by macduffy
Let's hope so! But remember we thought that FBU was going to make big bucks after the Christchurch earthquake.
Disc: Recently back in after a lengthy absence from the register!
similar here - dived back into STU after a while too..
-
19-12-2020, 07:12 AM
#942
Member
Good to see this one heading in the right direction finally. Bought into STU nearly 20 years ago and it plodded along quite happily as yield stock until it all went pear shaped. Threw some money at the above $1 rights issues just to see it go further south. Doubled down once it went below 60c - hopefully management have now plugged all the holes and it can pop above the dollar mark again in the new year. I'd expect the housing crisis and related residential building to help push them along, though not sure what their revenue split is residential vs commercial?<br>
-
19-12-2020, 07:23 AM
#943
STU is a classic case of a good business being run into the ground by bad management
but
Because it has excellent underlying fundamentals (being in an oligopolistically structured industry with entry barriers), it can survive the bad management and return back to profitability with new management.
As Buffett famously said : ‘Buy into a good business which can be run by a fool because one day, a fool will run it!’
Last edited by Balance; 19-12-2020 at 09:04 AM.
-
19-12-2020, 05:01 PM
#944
Originally Posted by Balance
STU is a classic case of a good business being run into the ground by bad management
but
Because it has excellent underlying fundamentals (being in an oligopolistically structured industry with entry barriers), it can survive the bad management and return back to profitability with new management.
As Buffett famously said : ‘Buy into a good business which can be run by a fool because one day, a fool will run it!’
Average ROE of 9.2% since pre GFC (so includes GFC)
-
22-12-2020, 02:39 PM
#945
-
22-12-2020, 02:42 PM
#946
Originally Posted by nztx
https://www.nzx.com/announcements/365469
22/12/2020, 9:02 am MKTUPDTE
' Steel & Tube Holdings Limited (NZX: STU) has signed an unconditional agreement to sell its property at 26 – 32 Hautonga St, Petone, Lower Hutt for $7 million on a sale and lease back basis.
The sale is expected to be completed on 22 March 2021.
Steel & Tube will continue to lease the property for a term of 2 years with two further rights of renewal of one year each.
The transaction has no material impact on the normalised earnings guidance provided by the Company on 17 December 2020.'
How much does this add to NTA ? 
If they had it for market value in their balance sheet, then it should make no difference at all ...
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
-
22-12-2020, 05:24 PM
#947
Member
I did a detailed look into their assets a couple of months ago when they were around 62-63cents as it was well priced. I would have felt more inclined to invest if they had owned their decent buildings/land, but they don't own many of their properties.
Historically lease prices and also buildings/land value only goes up. Although looking at this property sale the 2/1/1 lease setup looks like they will exit this property in the mid-term.
-
22-12-2020, 07:32 PM
#948
Originally Posted by Norwest
I did a detailed look into their assets a couple of months ago when they were around 62-63cents as it was well priced. I would have felt more inclined to invest if they had owned their decent buildings/land, but they don't own many of their properties.
Historically lease prices and also buildings/land value only goes up. Although looking at this property sale the 2/1/1 lease setup looks like they will exit this property in the mid-term.
Commercial rental yields must be close to historic lows though right? Lets say 5%. If they can beat that by investing the $7m in their business it's a good move.
Two years is a short lease so maybe they are thinking they can right size in time. Regardless they now have more flexibility depending on steel and property market conditions. Always nice to have.
-
22-12-2020, 07:33 PM
#949
Originally Posted by nztx
https://www.nzx.com/announcements/365469
22/12/2020, 9:02 am MKTUPDTE
' Steel & Tube Holdings Limited (NZX: STU) has signed an unconditional agreement to sell its property at 26 – 32 Hautonga St, Petone, Lower Hutt for $7 million on a sale and lease back basis.
The sale is expected to be completed on 22 March 2021.
Steel & Tube will continue to lease the property for a term of 2 years with two further rights of renewal of one year each.
The transaction has no material impact on the normalised earnings guidance provided by the Company on 17 December 2020.'
How much does this add to NTA ?
No Material Impact ? Really ?
Add a Lease Liability & Costs where there were Owner's own costs before
$7m paying down liabilities or not ?
Reduced financing costs if proceeds applied against loans - surely not ?
No Material Impact ?
What was STU's most recent bottom line Surplus (Loss) again ?
"no material impact on the normalised earnings guidance " - Could be a one off gain on sale.
Digging into this the property had a capital value of $6.6m so a small $400k gain.
https://www.stuff.co.nz/business/115...trial-for-sale
"The property has been home to Steel & Tube's reinforcing division for 13 years but is "surplus to requirements" and is being sold with vacant possession and by deadline treaty which is closing on September 25."
Last edited by Jaa; 22-12-2020 at 07:38 PM.
-
23-12-2020, 11:30 AM
#950
Tags for this Thread
Posting Permissions
- You may not post new threads
- You may not post replies
- You may not post attachments
- You may not edit your posts
-
Forum Rules
|
|
Reply With Quote
Bookmarks