lots of different views on this....here is mine:
fiscal year ending 6/30, cash flow from operations BEFORE changes in non-cash working capital = $59.6
Dividends paid = $33.6M
Capex = $33.5M
The key question is how much of CAPEX is for growth and how much is for sustaining capital. I have no idea but conservatively, lets assume sustaining CAPEX is 50%.
Then all-in POR = ($33.6 + $16.8) / 59.6 = 85%
And since 6/30, there are plenty of tailwinds to suggest that this year's POR will improve:
- the equity raise @ $7.20 and corresponding debt paydown (happened in last fiscal but full benefit this year)
- the buyback of shares in the 4.50 to 5.50 range
- the strengthening of the USD
- the drop in oil prices
- the general business growth and positive tone from management (validated by significant insider purchases)
I think the market was unjustly spooked by the divestiture by one of the large institutional holders last summer. Yet this transaction appears to be nothing more than a shareholder who is rebalancing their portfolio (they are still a significant shareholder). Q1 is the seasonally weak quarter and it is behind us now.
STB is a very small holding of mine, but I'm tempted to add more at these levels. I don't expect huge long term appreciation, but possibly a 25% bounce in a relatively short time frame. If not, then nice dividend and minimal downside.