Post by
drunk@noon on Oct 07, 2021 12:44pm
Q3 HRC avg $800 US $1000 cdn per ton higher than Q2.
It isn't rocket science. If production is approx same as Q2. Say, 675,000 tonnes, mulitply by $1000 equals 675 million dollars. Q2 net income was $380 million dollars. So fully capturing the 675 million give you a figure of 1.06 billion. or $12.50 a share. Now they likely won't capture the full rise in HRC price, and they will likely have some additional costs, and this doesn't take tax into account--tough given what tax reducing loss carryforwards etc they utilize. But if one knocks off $3 bucks a share. We would be talking $ 9.50 eps, and cashflow in the billion range. And even with steel dropping. Q4 will bring another 6 or so dollars through the door. In short the current share price, and the 15 bucks coming through the door in q3 and q4. And the fact earning power even at 1000 us a tonne, gives you a fully taxed 12 eps. The stock in the 40 dollar range, if one back out the 15 bucks in cash, gives you a 25 cash adjusted shareprice (EV) with earnings power of 12 bucks in a 1000 us/tonne steel envoirnemt.
This is why I hold--- not because I think steel is going to contineu to sell at 1500 dollars US plus.