Originally Posted by
Shareguy
Some good questions on the investor call including this one.
The margin comparison is a little misleading. Stu includes freight and labour costs in there gm. Vulcan does not. Mark said that as a comparison stu would be in the high 30”s excluding the freight. So still a difference but a lot closer. A lot of the difference is down to Vulcans downstream plate and coil processing which is at high margin. Stu are planning on addressing that with some investment in this area.
CEO also stated that the second half has started well with Jan 33 percent up.
Jarden and others very complimentary on the call to a fantastic result.
I think the share price is doing pretty well considering on how the dow ended up and with what’s going on with Covid and the Russians.
Very confident however that there will be a number of fund managers and investors looking at this result and thinking to themselves there is still a lot of upside.
Historically Steel and Tube has always traded similar to other distribution/building companies at a pe well above the current level. That was when stu had a lot of debt, so the current discount to me is unwarranted.
Steel and Tube seems to be well run these days and Mark certainly is saying all the right things in my opinion. For me it’s a case of waiting and watching for the market to take note. And while I wait will enjoy one of the highest dividends on the NZX.