STU - Steel & Tube Holdings

[BeeBop]

If I am not wrong (back of envelope), their price to sales ratio is still low....if price is 2.82, share on issue are 90 million and sales are 500 million that puts the ratio of around 0.5? This is a key ratio for me as it shows, for this type of company, what is actually passing through the system! For sTU where I am not sure of the growth and it is cyclical this will keep me in the investment....

[percy]

Yes a good year,but was not as good as I hoped for,so I sold.

[BeeBop]

While the rest of the family has been watching the rugby, I have been reviewing STU in my normal manner. I will buy more as all is looking solid. However, I shall take a gamble on the price easing a little more. Agree that there is nothing startling about the report, just solid low margin industrial.

[banter]

Projections.............. 2015............. 2016......................2017
Craigs eps................0.25.................0.29...... .................0.35
4-Traders eps...........0.25................0.289........... ...........0.329
Craigs PE..................11.5..................9.7..... .................8.1
4-Traders PE..............11.4.................9.9.......... ............8.7
Craigs dps..................0.20...............0.23...... ...............0.28
4-Traers.dps...............0.195..............0.217. ................0.24
Craigs div yield............6.8%...............8%............ ..........9.6%
Craigs eps growth.......23.2%.............17.8%.............. ..20%.

The eps growth took me by surprise,as did the yield..

2015 AT-EPS came in at 24.5c, net dividend 19c, fully imputed.

1) Aquaduct acquisition announced today.
- Relocatable factory making large bore very long pipes (fewer seams). Looks good.
- Bought off the receivers for asset value $8m; forecast EBIT 0.5-1.5m with NO project income. Staff and branding / goodwill retained.
- Prospect of up to $20m project income income from major irrigation projects (giving, by my estimate, $4m NPAT).
- Net effect on eps 0-5cps (my estimate).

2) Fortress acquisition adds 4.5 cps
3) Inherent growth estimated at 11% (20% in 2015)
4) debt/debt+ equity 30% in 2015, rising to 32% with aquaduct buy, and back to 30% in 2016.
The 2015 dividend payout ratio of 78% seems sustainable.

	Jun-15	post-aquaduct	06/16 e
Bank debt	72	80	73
equity	167	167	174
d/(d+e)	30%	32%	30%

Looking at 2016:

	15	16
npat ul	21.4	30.8
net eps ul	0.245	0.340
net payout %	78%	78%
gross dps	0.264	0.366
gross yield %	10.1%	14.0%

eps for 2016 = 24.5c+11% growth + 4.5c (Fortress) + 2c (Aquaduct)

Looks like a high yielding stock with strong recent EPS growth, two good recent acquisitions and a good story - irrigation income.
It's in a slow downtrend.

[winner69]

Sure will bean earnings surprise in 2016 by the looks of it ....and maybe 2017 as well

Market don't like announcement

https://www.nzx.com/files/attachments/224651.pdf

[percy]

This result shows it is very difficult swimming against the tide.

[LAC]

Tough times for S&T, I really like their report though - very clear and straight up on their situation.

[Balance]

Tough times for S&T, I really like their report though - very clear and straight up on their situation.

Don't share your view.

When a company reports without showing previous year's numbers in the commentary, you know it is down down down.

[Joshuatree]

S/p hitting $2.31 up re 10% since announcement on good vol, shooting through 60DMA. Interim Div 9c (last 6 month 10c) re 8.23% nett yield (according to ASB)

[winner69]

Misleading representations re products not a good look even if though they say just an oversight. **** does happen sometime.

Ironic seeing STU moan about shonky imports and how unfair the world is to them.

Whatever a reflection of company culture - obviously not good