Couldn't agree more, let market do that math and decide which side they want to be on. There is enough material out there by now to work out a meaningful number.
Printable View
Well I have listened to the presentation and make the following observations.
CEO states very positive outlook with conditions very strong. Expects continued dividend growth with capital management opportunity’s.
14 percent increase on revenue is substantial. Taking into account the $ 25m cash at YE21 ($0.15 per share) the forward PE highlights how cheap, cheap, cheap this stock is.
YTD revenue is up 14% including the lockdown period, however if you look at the chart on page 31 of the presentation, the post-lockdown sales seem to be around 50% or 60% ahead of last year. Obviously there could be some pent-up demand caused by lockdown, but quite likely the underlying yoy growth will be considerably more than 14%.
Well, there are 2 issues that sort of approach at a high level.
The first is an understanding of what your communications strategy is. And that only comes about after once you have addressed a range of factors eg what does the company want to achieve with its communications; what 3rd party info sources are there eg brokers, comparable company info etc (in STU's case the answer is not much): what sort of corporate do I want to be, eg open/closed/opaque(closed one day/open the next), balance v imbalanced(eg good news only/all news).
Say for STU do you know what its required internal rate of return is? Answer will be no. So tomorrow it announces it is spending $25m on project x. Absolutely meaningless to an investor.
The second issue is the NZX requirements which are binary outcomes. From the rules it would appear prospects for a material profit increase are zero. Why? Because the rules require disclosure should profitability do certain things. It isn't about spoon feeding and letting everyone work it out for themselves. It is about having an informed market. A company doesn't even have to issue guidance for this rule to affect it. So a company cannot wait to the FY announcement and release a 50% gain in underlying profitability and say well you investors should have worked that out. The company has breached its continuous disclosure obligations.
Well, the announcement today clearly states its a "Trading update" referring to top line numbers being sales/revenue. They may be another one later this year on early next year relating "Earnings update" which may throw more bit colour around margins etc. Until such time, market has to make its own assumptions around that and for sure if there is going to be huge variation from normal margins, they may well provide an update on that, in the meantime its BAU.
Vulcan noted in its Product Disclosure Statement that acquisitions will become a key part of its growth strategy, and access to capital markets will be important to fund this.
I wonder…….
You are mistaken Fiordland Moose. Fletchers actually got approval from com com and STU under Nick Calavrius also got com com approval to buy Fletcher steel. In the end nothing happened till the recent attempt by FBU which was ended and no application to comcom. Today is very different and I have no doubt that Fletchers or Vulcan would get approval. There is plenty of other competition with Asmuss and United group plus other smaller players. I do agree more likely in Australia esp Wa.
I am happy for STU (one of NZ's oldest listed companies) to remain listed rather than be taken over as I believe current industry settings and management can take profitability and the sp up a long way.
Remember how AIA nearly got taken over at $4.00 by the Canadians and thank goodness, that was blocked as AIA has gone on to be one of the best performers on the NZX.
Meanwhile, a little titbit from my broking contact (after yesterday's listing of Vulcan & STU's trading update) who told me that a couple of analysts have decided STU represents better value and upside.
The lack of volume on the sell side and the willingness of a buyer yesterday to pay up for stock (when there's volume around $1.25) suggest that the titbit infor is happening. So there's a little bit of stock being offloaded in the over-hyped Vulcan and attempt to get stock in STU?