OTCPK:STZHF - Post by User
Comment by
donmayneon Dec 20, 2018 6:41pm
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Post# 29143664
RE:RE:RE:Thoughts
RE:RE:RE:ThoughtsSTLC has great fundamentals, modern equipment, low cost, low debt, highest EBIDTA of North American producers. It should survive where other steel companies might be squeezed by their poor fundamentals.
What STLC does not have is a track record exceeding one year since the restructuring. It is also controlled by a single shareholder group - Bedford, controlled by Alan Kestenbaum. Many funds will not touch companies with these characteristics.
Both characteristics will disappear over time. The track record of reported earnings will exceed a year in February 2019. Bedford sold 30% of their holdings in 2018 although the company is buying back up to 5% of their outstanding shares.
Tariffs are allowing it to make inroads making sales in the Cdn steel market. As long as those tariffs stick around for another six months, it should be a benefit. I suspect the regular dividend will increase after Q4 unless they again declare a special dividend.
When the markets start recovering, STLC will be noticed by its ultra-low PE ratio and lengthening track record. Expect another 10% private sale by Bedford once it reaches the high teens. So far, the price decline has burned every investor of STLC.