STU - Steel & Tube Holdings

[nztx]

So how is a Share Buyback going make STU trade better / more effectively / perfect
the fine art of making plenty of profit & with fewer excuses in their neck of the woods ?

Or likely to be distraction for Team STU trying to perfect the fine art of selling their bits & pieces
yet again (following the past trail of failing to pull off the notion profitably up to expectations) ?

Money tossed at shareholders in form of a dividend would appear to far simpler for a busy
challenged Team STU trying to claw themselves back to where they previously were at ?

A dividend as in cash landing in stakeholders hands is also likely to see fastest responses
in growing stakeholder's perception of the outfit rather than complex formulae of 'your slice
of the action divided by 5% fewer than the previous number of shares means you have
grown your notional share of the action' even if it's difficult to see this landing in stakeholder laps,
that is if it ever did ..

Stakeholders in receipt of distributions are likely to vote accordingly & may therefore deliberate
that the ship is worth more than it's previous rating & SP, thus enhancing 'Stakeholder Value' they
see in STU, in the same way as has been seen with other listed companies eg HLG, BGR etc

If not mistaken didn't STU double it's issued Capital a few years back by Cap Raise only to completely
basically destroy all/most of the extra equity raised within 18 months with write downs & losses ? ;-)

STU would appear to have some way to go to restore it's credibility in eyes of stakeholders, keeping to
perfecting the knitting & not resorting to any smart tricks on the long trail doing so .. surely

Stakeholders may well be expecting STU to return to dividend paying status in short to medium term ..

This is the same outfit that was once suggested to be worth $1.75 a share in eyes of a suitor, just a few years back

We all know what happened then , and then subsequently more recently ..

[nztx]

The Market may well be expecting a Good Result from STU in face of strong economic tail winds prevailing currently

The Real Test will be of STU's performance in lighter or less favourable winds and what Team STU manage to deliver
in those conditions ..

At last year end 2020 STU reported $31.6 m in tax losses up from $16.1 m a year earlier, to offset
against future taxable profits

Imputation credit balance at last year end 2020 was $5K down from $0.7 m a year earlier

Clearly, unless further tax is paid to attach to dividends, any future distributions will attract full 33% DWT
deduction to Govt's Tax Collectors

Who knows, STU's Board may consider recovering & offsetting past Tax Losses completely, before making
further distributions to stakeholders ..

In that way 100% of value enhancement is retained into strengthening the ship further..
possibly in turn making STU a potential takeover target once again ?

[SailorRob]

I think I'll stick to Warrens sentiments and Maths here.

So how is a Share Buyback going make STU trade better / more effectively / perfect
the fine art of making plenty of profit & with fewer excuses in their neck of the woods ?

It isn’t going to change the way they trade or make profit. It will leave them with fewer excuses though as it will stop them squandering the cash and will ensure it is allocated at the very highest return possible to us the owners. The profits which are still very significant over the last 13 years against current market cap even after taking into account the capital raisings, will be then distributed to fewer owners.

Or likely to be distraction for Team STU trying to perfect the fine art of selling their bits & pieces
yet again (following the past trail of failing to pull off the notion profitably up to expectations) ?

Not sure what is meant here, if making correct capital allocation decisions and engaging in the most simple of all transactions is a distraction then we have bigger issues to worry about.


Money tossed at shareholders in form of a dividend would appear to far simpler for a busy
challenged Team STU trying to claw themselves back to where they previously were at ?

Again not sure how being busy or challenged relates to correct capital allocation decisions, it could appear simple to simple minds though yes. This would be disturbing for shareholders.

A dividend as in cash landing in stakeholders hands is also likely to see fastest responses
in growing stakeholder's perception of the outfit rather than complex formulae of 'your slice
of the action divided by 5% fewer than the previous number of shares means you have
grown your notional share of the action' even if it's difficult to see this landing in stakeholder laps,
that is if it ever did ..

Again I’ll go with Warren here, we’re not interested in cheap thrills but the best returns possible. I’m not sure about any complex formula. I’m interested in earnings per share and future dividends per share, certainly nothing complex but I can understand how for some it may be, however it doesn’t matter if people understand or not, the benefits come regardless.

Stakeholders in receipt of distributions are likely to vote accordingly & may therefore deliberate
that the ship is worth more than it's previous rating & SP, thus enhancing 'Stakeholder Value' they
see in STU, in the same way as has been seen with other listed companies eg HLG, BGR etc

Agreed and this is the exact point I'm making. The same money distributed to less owners...

If not mistaken didn't STU double it's issued Capital a few years back by Cap Raise only to completely
basically destroy all/most of the extra equity raised within 18 months with write downs & losses ? ;-)

No, this is not how I see it. The equity had already been destroyed, write downs were acknowledging money that had LONG since disappeared.

STU would appear to have some way to go to restore it's credibility in eyes of stakeholders, keeping to
perfecting the knitting & not resorting to any smart tricks on the long trail doing so .. surely

'Resorting to smart tricks' is this how Buffett sees share buybacks? The one man who has campaigned against and ciiticised corporate 'smart tricks' forever? Is simple Math a smart trick? This is one of the most simple concepts in business ownership. There is nothing tricky about it but plenty smart.

Stakeholders may well be expecting STU to return to dividend paying status in short to medium term ..

Perhaps. But what they should be expecting is that the company maximises their returns.

This is the same outfit that was once suggested to be worth $1.75 a share in eyes of a suitor, just a few years back. We all know what happened then, and then subsequently more recently ..

We do and there is the opportunity.

[nztx]

I'm still perplexed as to how 'Warren Buffett' references are relevant to a thread on STU ...

Would Warren actually even look sideways in passing at STU .. or too small .. bigger fish to fry elsewhere ?

or just too troublesome ? or the NZ Market now getting over valued ?

[SailorRob]

I'm still perplexed as to how 'Warren Buffett' references are relevant to a thread on STU ...

Would Warren actually even look sideways in passing at STU .. or too small .. bigger fish to fry elsewhere ?

or just too troublesome ? or the NZ Market now getting over valued ?

Yes I understand that you don't get it and that's fine. Buffetts thoughts on business and investment are of course relevant to any company in the world.

Buffett like myself would be praying for STU share price to fall, not rise. See if you can figure that one out!

[Arbroath]

Yes I understand that you don't get it and that's fine. Buffetts thoughts on business and investment are of course relevant to any company in the world.

Buffett like myself would be praying for STU share price to fall, not rise. See if you can figure that one out!

I would love to see STU and MPG do share buybacks. It is frustrating in NZ that more listed companies don’t do buybacks. Unimputed dividends are just dumb when a company is trading so far below what the Board think is fair value. Remember they considered $1.70 and then $1.90 to be less than fair value only 2 years ago.

[nztx]

I would love to see STU and MPG do share buybacks. It is frustrating in NZ that more listed companies don’t do buybacks. Unimputed dividends are just dumb when a company is trading so far below what the Board think is fair value. Remember they considered $1.70 and then $1.90 to be less than fair value only 2 years ago.

Agree with you there

[nztx]

Yes I understand that you don't get it and that's fine. Buffetts thoughts on business and investment are of course relevant to any company in the world.

Buffett like myself would be praying for STU share price to fall, not rise. See if you can figure that one out!

You may be praying for fair while that Warren might find some interest

Doesn't he usually like stocks north of $10 & that's USD at that ?

I think my revised 'Beat Buffet' model seems to be working better than your prayer model ..

[SailorRob]

You may be praying for fair while that Warren might find some interest

Doesn't he usually like stocks north of $10 & that's USD at that ?

I think my revised 'Beat Buffet' model seems to be working better than your prayer model ..

My apologies if you thought my post suggested that Buffett might be interested in STU. The suggestion of such would be one of massive ignorance. I meant if he were in my shoes or that would be what he'd be advising us, were we so lucky.

Now a stocks market share price means nothing at all. Doesn't tell you if it's cheap or expensive, nothing. So North or South of $10 means nothing.

I'm sure you are able to beat Buffet whoever that is, but Buffett? I'll place any bet you like that Berkshire will destroy your returns over the next 10 years. What are you scared of, he's a washed out old man.

[Filthy]

new CFO - pretty good appointment, https://www.nzx.com/announcements/366599