MPG - Metro Glass

[trader_jackson]

MPG has debt about the same as its market cap ($55m), being squeezed quite badly, yet has doubled in price in the past 6 months (since the covid low's)
STU has no debt, a much more commanding market position, better cash flows, and probably less chance of raising capital... and yet the share price is not even 20% higher than it was 6 months ago (in fact in mid August, STU's share price was virtually the same it was during the covid lows of early April)

I'm not saying STU is a 'great' business, nor am I saying MPG is a terrible business... in fact I'd say they're both dogs at this point in time.. but interesting that MPG has doubled in price (far outperforming the broader market) while STU has only gone up a mere 17% (underperforming the boarder market by a good chunk)

[t.rexjr]

It wasn’t an overseas rival setting up a new plant in NZ ....it was a local aluminium fabricator who was going to do their own glass.

Quite a chunk of Metros local customer base at risk.

It’s up and running but Metro say very little about it except that capacity outstrips demand and they will vigorously compete for work.

Vigorously compete for work? That rival, as far as I'm aware, are (or perhaps were) a rather large portion of Metro's business. The way that rival operates means there is little to no chance for Metro to compete within that supply chain. That rival is NZ biggest residential joinery supplier that captures over half of the market. That's over half the market that Metro will not be able to compete in once that rival is up to speed...

'Vigorously competing for work'. They're having to go into battle against another large NZ supplier (among others) and win over their competitors customers to replace lost contracts. Surely that translates to slashing margin. Something or someone will have to give...

[winner69]

If it reaches 45 cents I will be a happy bear, if it reaches 90 cents I will be an ecstatic bear!!

Hang in there rupert

I wouldn’t be surprised to see beagle on here soon

[RupertBear]

Hang in there rupert

I wouldn’t be surprised to see beagle on here soon

I think the last time the beagle was on here he called Metro a mange infected mutt or some similarly affectionate name

[winner69]

I think the last time the beagle was on here he called Metro a mange infected mutt or some similarly affectionate name

You know beagle can change his views ....the medicine worked and metro now a greyhound and beagle will fall in love again

[Leemsip]

This share is so thinly traded, No depth to buyers at all, so could see a 2-4c drop today (IMHO). Be good to consolidate somewhere in the low 30c area pre-announcement.

Nothing goes up in a straight line?

[Filthy]

STU has no debt, a much more commanding market position, better cash flows, and probably less chance of raising capital...

yes, STU is overdue a run back up as well eh TJ!
MPG now up ~54% since mid-Sept & still looking strong.
continuing to pay down debt reduces the chance of a dilutive cap raise.

[Filthy]

I wonder how much they could get if they flicked off AGG in ozzy now EBIT is positive

[Traderx]

MPG has debt about the same as its market cap ($55m), being squeezed quite badly, yet has doubled in price in the past 6 months (since the covid low's)
STU has no debt, a much more commanding market position, better cash flows, and probably less chance of raising capital... and yet the share price is not even 20% higher than it was 6 months ago (in fact in mid August, STU's share price was virtually the same it was during the covid lows of early April)

I'm not saying STU is a 'great' business, nor am I saying MPG is a terrible business... in fact I'd say they're both dogs at this point in time.. but interesting that MPG has doubled in price (far outperforming the broader market) while STU has only gone up a mere 17% (underperforming the boarder market by a good chunk)

MPG has largely maintained margins, STU has near zero normalised EBIT. STU is achieving cashflow by running down inventory. If STU has a "commanding market position" why cannot they get customer to pay sufficient margin so they can earn EBIT?

[RupertBear]

I exited at 36c today. While I thought the market hadn't recognised the effect to the debt reduction, I think the road up from here will take a lot longer. A good gain but moving to a longer position.

Excellent timing to exit at 36c DazRaz well done!!