# STP - Stericorp Limited



## Ang (3 September 2007)

I can't believe that no one has started a thread on STP up 28%, with the news that the litigation is over, with a net payout after the convertable not being $20M ++ this little baby should fly, especially if she breaks 10 cents.
I have drawn short, medium and long term resistance lines on my graph attached. should see it go past 13.5 cents.
kind reg
ang


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## Ang (3 September 2007)

Can't believe closed on the high and no one has said anything on this one. I think eveyone is upset they didn't get in at 7.3 cents. Any comments??
kind regards
An01


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## doctorj (3 September 2007)

Ang said:


> should see it go past 13.5 cents



What makes you think it'll go past 13.5?  I see your resistance coming in from the 14.7.06 high, but it's a long way to get through there before it can go for a run at 13.5.


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## Ang (4 September 2007)

doctorj said:


> What makes you think it'll go past 13.5?  I see your resistance coming in from the 14.7.06 high, but it's a long way to get through there before it can go for a run at 13.5.




Because the average price before the announcemnt was 8 to 8.5 cents, If they get net $20M payout, that represents 5 cents per share (8 or 8.5 cents + 5 cents = 13 to13.5 cetns). They may also get considerably more as they need to factor in the oportunity loss and compound interest. If you are using technical analysis, then check the depth of the break out. Over the last 6 months the low has been 6.6 cents to 7 cents, medium to long term break out will be 10 cents, which makes it 13 to 13.5 cents. As they won't be getting the money and final judgement on the total amount payable until Nov, there will be some day traders getting nervouse and may see it as low as 8.5 cents, any lower and I will buy another million. Great buying opportunity may come about.


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## Ves (31 January 2013)

Interesting little company.

Consistently growing top line over time (although it is slowing somewhat in this enviroment) and reliable earnings since 2008.  Margins are pretty compact. The industry is fairly defensive, and the ROIC isn't too shabby (although it depends on how much of the goodwill you keep in to account for the JV). Their competitive position is reasonably dominant - it looks fairly sustainable on a quick eye. They service both public and private hospitals which is positive (so they are somewhat insulated from health care cuts by the government).  There's always going to be clinical waste too.

Debt is a little on the high side (around 2.5x EBITDA), but cashflow is robust enough to keep servicing it as far as I can tell.  Debt or capital hasn't really been used to expand or fund operations since 2008.

The earnings multiples are all fairly cheap.  P/E of  7 and EV/EBIT between 7 and 8. Definitely not a screaming bargain, but not exactly expensive.

The interesting thing to note, and why it is possibly on the "cheap" side is the relationship between the Joint Venture partner Daniels International and the company.   Daniels is ran and owned by one of the majority shareholders (70% I believe) and board members / directors of STP.   The company is almost a legitimate (listed) subsidiary of Daniels in a lot of ways.  STP is ran like a private company and it appears that traditionally the main beneficiaries of the company have been Daniels with the leases and goods and service contracts.  The shareholders are starting to get something back via the introduction of a dividend, but there appears to be a lot of questions and grey areas as to what could happen in the future with some of these related party arrangements.  There are some notes in the accounts, but they aren't obvious at first.   The announcement was made in the 2007 financial year after it was approved at an EGM.  The whole arrangement is unfortunately a potential red flag to me (not because I know or have reason to think it will go bad, but because it's an unncessary risk).  However, someone hear may know something or be interesting in having a look at the company at these prices.


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## System (8 July 2014)

On July 7th, 2014, Stericorp Limited (STP) was removed from the ASX's official list following completion of the Scheme of Arrangement with Catilina Nominees Pty Ltd as trustee of the Danny Boulas Daniels Family Trust.


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