# SGM - Sims Limited



## Sultan of Swing (12 September 2006)

Hi all

A Lurker and first time poster here. I've found threads on most of the companies I'm interested in but haven't found anything on SGM.

Does anyone have any interest or comments to make on them?

I've been holding some for a little over 12 months and looking at the forecast earnings on Commsec, they don't appear to have a lot of growth left in them.

Any opinions and insights are most welcome.

Cheers 
SOS


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## Julia (12 September 2006)

Hello SOS

I haven't looked at SGM since selling it at the beginning of the year.
I held it for about 18 months and exited with about 55% profit plus the excellent dividend return.

Just now taking a look at it again, it looks very healthy.  However, I've no idea what the big picture is like for steel and recycling.  The rising SP indicates it must be OK.

Are you buying this?  What background do you know about this sector of the market?  I might get interested in jumping back on.  Thanks for bringing it up.

Julia


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## Sultan of Swing (12 September 2006)

Julia said:
			
		

> Just now taking a look at it again, it looks very healthy.  However, I've no idea what the big picture is like for steel and recycling.  The rising SP indicates it must be OK.
> 
> Are you buying this?  What background do you know about this sector of the market?  I might get interested in jumping back on.  Thanks for bringing it up.




Thanks for your reply Julia

I haven't bought any since I initially bought some and I don't intend buying anymore at this point. This is partially because it's a larger portion of my portfolio and partially because I don't fully understand the fundamentals. 

The predicted lack of growth is a concern to me although I realise it's only the opinion of a few analysts. Having said that, they more than likely know a lot more than I do. 

I know virtually nothing about the sector, or any sector for that matter. This is why I lurk and don't post   : . I'm here to learn. 

Cheers
SOS


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## 3 veiws of a secret (12 September 2006)

I was very tempted to buy 3000  shares about 3 months ago ( I think) Only because I thought Sims might try a takeover of SSX or Bluescope Steel. But what got me interested was that SGM has exposure in the USA. The price had stooped to $13.25 or $14.25. Huntley's seemed excited by the share. Alas I bought into RIN !!!!! drastic error at present! 
But yes USA is the rough diamond I t'ink.


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## finnsk (19 October 2006)

SGM is flying last few days is at $23.36 or up 5.56% today are you still in Sultan of Swing?


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## PhoenixXx (7 May 2007)

No one hardly touched or interested with SGM.
Just completed Acquisition of E-Recycling Assets of Noranda recently and the SP went skyrocket ever since.
Any views anyone?


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## ozambersand (13 May 2007)

I held Sims for a while but sold a couple of months ago and would like to get some again.

I am impressed by what they are doing. They seem to be gradually tying up the recycling markets in Europe and the US where it is a bigger concern than it is here.

One thing to be wary of at the moment is that when they bought Hugo Nue a while ago, those who held Hugo Nue shares had an ecsrow on selling them until the end of April.

They got a "speeding ticket" from the ASX back in January when the share priced jumped back then as you can see from this cut and paste of the announcement of 30/1/07







It will be in these holders of Hugo Nue's interest if the share price is high while they sell out (presumably gradually so as not to spook the market). I gather some American institutional investors may not be keen on holding shares in a non-American company (although it is dual listed from memory).

Whether the price has been manipulated this high in order for this to happen I cannot comment.

It is a good company and may have been undervalued when it was selling at $19.65 in January (when I bought some  . Now that it has topped the $26 mark......  

If it does come down again I will buy back in for the long haul and not sell this time!!


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## ozambersand (9 August 2007)

Anyone got any ideas as to why Sims shares suddenly dropped 7% at one time today? This was basically against market trend and I haven't been able to find any news items.
It wasn't Hugo Nue getting out as they had already announced they did that a couple of months ago.
It's creating a good buying opportunity at any rate.


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## rederob (9 August 2007)

ozambersand said:


> Anyone got any ideas as to why Sims shares suddenly dropped 7% at one time today? This was basically against market trend and I haven't been able to find any news items.
> It wasn't Hugo Nue getting out as they had already announced they did that a couple of months ago.
> It's creating a good buying opportunity at any rate.



I think it may be more to do with steel prices falling.
SMG's biggest revenue stream is in steel recycling, I believe.
So its margins will be declining a fair bit, and for a fair while to come.
A good company, and one worth watching for the inevitable bounce.


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## Nicks (15 August 2007)

So the price of Lead went up overnight amid significant shortages, SGM share price is down.... good buy then thanks to external unrelated factors?


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## PhoenixXx (11 September 2007)

I've been following this share for few months and noticed some strange movements in sp. 
Firstly, every 30 minutes or so, there would be a quantity of 119 shares traded. And surprisingly, 'sometimes' the sp would lead to where the 119 shares went, ie the sp would go up if 119 shares bought from the market, and vice versa.
Secondly, seems like 'some' orders (buys or sells) are generated electronically to a certaint extent.
Lastly, the volatility. Low quantity of shares traded could even lead the sp went skyrocket.

Any opinion anybody?


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## Nicks (24 September 2007)

Ok so there is a trading halt and I have no idea why. Can someone shed some light onto this? any suspected developments or anything on the cards that they know of or heard? +ve or -ve?


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## Sultan of Swing (24 September 2007)

finnsk said:


> SGM is flying last few days is at $23.36 or up 5.56% today are you still in Sultan of Swing?




Hi finnsk

Sorry for the delayed response. I just realised I hadn't subscribed to this thread and went looking for it.

Yes, I'm still holding. It's been nice to see the steady rise, I'm up just over 100% over 2 years.


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## Sultan of Swing (24 September 2007)

Nicks said:


> Ok so there is a trading halt and I have no idea why. Can someone shed some light onto this? any suspected developments or anything on the cards that they know of or heard? +ve or -ve?





I'd be interested to know why they're in a trading halt too. Anyone have any insight?? 

Cheers


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## doogie_goes_off (24 September 2007)

Sims have been generating plenty of cash, i'd have to guess it's going to be an aquisition of some sort, probably have run out of room for organic growth.


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## Nicks (25 September 2007)

Funny how the Financial Review today even got it wrong. I guess sometimes information doesnt leak.
Anyway still great for the company and im now going to hold it as a long term investment. Should get good SP growth and dividends now. High market share and high synergies from the merger = all good.


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## GreatPig (17 January 2008)

Nice breakout today on decent volume. The last few days have been pushing up from the longer term trend line (which goes back to the start of 2001).

Good to see something looking positive at the moment.

GP


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## Julia (18 June 2008)

It has been suggested that SGM is currently a take over target.
I haven't heard anything about this.
Does anyone know if this is correct?
Any holders?  It's looking very good.


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## Tysonboss1 (7 August 2008)

Sims has been trending down for a while now,

I am starting to think that it might be a good buy at around $30, as long as the price of metals remains high I think that they should be able to keep growing Volumes through there scrap metal yards and maintain margins.

It's trading on a PE of 13 at the moment which I think is good value for this company, trading in metals is also a natural inflation hedge also.


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## Tysonboss1 (23 September 2008)

Sims has been buying up metal recyclers in the USA for a while now and when they make the annoucement it is always some thing along the lines of this;

_Sims Group Limited (Sims) announced today it has acquired the assets of Weinert Recycling, a ferrous and non ferrous scrap metal recycler with operations in Middletown and Liberty, New York. The financial terms of the deal, including price, were not disclosed, however the cost is not material to Sims._

What I am wondering is, what exactly do they mean by that last bit that the cost is not material to them.


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## Nicks (24 October 2008)

It is down quite alot today after announcing it has tripled Net Profit. With the AUD heavily down I think this is a good opportunity today.


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## cornnfedd (20 November 2009)

> Sims Metal announces capital raising to fund growth strategy
> 
> SIMS Metal Management has announced a $475 million capital raising to fund a growth strategy.
> It will raise $400 million from a fully underwritten institutional placement at $21 a share, the company said in a statement today.
> ...



http://www.news.com.au/business/story/0,27753,26375481-14334,00.html


anyone having a look at this one?


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## piggybank (4 August 2014)

The company doesn't appear to have too many friends (or followers) given that the 2 threads that are dedicated to this stock had their last posts loaded before 2010.........


​


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## So_Cynical (13 January 2016)

Bought 6K worth for the super fund today @ $6.37 - great boring business, over 250 facilities across 5 continents, a global multi currency operation, true aussie success story...big mature business trading at an all time low.


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## Triathlete (13 January 2016)

So_Cynical said:


> Bought 6K worth for the super fund today @ $6.37 - great boring business, over 250 facilities across 5 continents, a global multi currency operation, true aussie success story...big mature business *trading at an all time low*.




I see the All time low was at $1.89 on the 13/11/1992.

Strategic comment from Lincoln Indicators Stock doctor below. 

SGM is in a Strong Financial Health position (GR1), but fails our management assessment criteria (GR2). Thus the company cannot be considered a Star Growth Stock. Additionally, the company's dividend yield is below that of the broader market. As such SGM cannot be considered a Star Income Stock.

SGM operate in a low margin environment with increasing efficiencies the key to improving profitability. SGM is currently undergoing an improvement process that is targeting to produce better sustainable returns in the future.

Consensus price target shows $8.45 so certainly showing value at current prices.

EPS for this year is -51% 
ROA...................  1.64%
ROE...................  2.62%
Rev Growth.......  -51.06%

Technically does not look good at the moment still showing signs that the stock could fall further, good luck with it anyway.


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## skc (13 January 2016)

So_Cynical said:


> Bought 6K worth for the super fund today @ $6.37 - great boring business, over 250 facilities across 5 continents, a global multi currency operation, true aussie success story...big mature business trading at an all time low.




Why buy recycled steel when new steel is cheaper than cabbage? 

http://www.smh.com.au/business/mini...now-cheaper-than-cabbage-20150708-gi81ea.html


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## Value Collector (13 January 2016)

skc said:


> Why buy recycled steel when new steel is cheaper than cabbage?
> 
> http://www.smh.com.au/business/mini...now-cheaper-than-cabbage-20150708-gi81ea.html




Because it still takes less energy to melt scrap than it does to produce steel from Pig Iron (Coal and Iron ore)

As long as it costs more money to transport scrap steel to the tip and pay a tip fee, than it does to take the scrap to a scrap yard and get paid some peanuts, the scrapping industry will be generating scrap.

Do you know how much it would cost to put a car into land fill, why would you pay to do that when you could scrap it and get paid even if you only get paid $20.00 its better than having to pay $100 to bury it.

and why would a steel mill not use scrap if its available, its cheaper and most of their systems are setup to use it, some steel mills only use scrap.


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## So_Cynical (13 January 2016)

Triathlete said:


> I see the All time low was at $1.89 on the 13/11/1992.




I think they did a code change about a decade ago, that's probably the reason for the discrepancy. 

Anyway this is for the super fund so im limited to the ASX300 (AustSuper) and i have had terrible luck with the superfund, my specialty really is the smaller end of the market.




Value Collector said:


> and why would a steel mill not use scrap if its available, its cheaper and most of their systems are setup to use it, some steel mills only use scrap.




And many companies like to use recycled product because it's seen as green and PC


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## So_Cynical (15 February 2016)

So_Cynical said:


> Brought 6K worth for the super fund today @ $6.37




Closed at $7.63 today, would of sold but i slept in, open profit 19.7%  nice pop for 1 month.


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## peter2 (16 February 2016)

Nicely done SC. The initial price target must be the gap fill up at 9.25. 

I couldn't buy into this sector at this time even though the chart shows a nice H&S reversal pattern.


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## So_Cynical (13 April 2016)

peter2 said:


> Nicely done SC. The initial price target must be the gap fill up at 9.25.




Hit 9.30 today...took a while to fill the gap.  im still holding.

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So_Cynical said:


> (13th-January-2016) Bought 6K worth for the super fund today @ $6.37




Did it again, yet another double bottom bought, been a great buy indicator for me over the years.
~


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## galumay (13 April 2016)

So_Cynical said:


> Hit 9.30 today...took a while to fill the gap.  im still holding.
> 
> Did it again, yet another double bottom bought, been a great buy indicator for me over the years.
> ~




The market is a funny beast isn't it?! A friend shorted these when they were over $9 last time and made a great trade on that drop down to where you brought in.

His logic seemed perfect at the time, his analysis was the market didn't yet realise how much trouble the company was in due to such low iron ore prices and the release of their half yearly report was likely to lead to a big drop in SP. 

Now your logic about them being oversold and good buying has proven to be equally prescient! 

The real art would be making coming to both those conclusions and winning on both trades in either direction!!


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## So_Cynical (13 April 2016)

galumay said:


> The real art would be making coming to both those conclusions and winning on both trades in either direction!!




That would be something to behold ^ i reckon picking tops would be harder...have always thought that if one could just focus on 10 stocks say, with total devotion to just those ten, perhaps a certain directional confidence could be developed over time.

i've picked multiple bottoms with a few stocks, precise tops rare as hens teeth, general big tops i certainly don't want to buy into.


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## So_Cynical (11 November 2016)

So_Cynical said:


> (13th-January-2016) Bought 6K worth for the super fund today @ *$6.37*




Intra day high of $12.90 today  didn't see that coming, 100% profit in 10 months, the latest pop has something to do with America being great again i imagine. :dunno:


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## So_Cynical (16 February 2017)

UBS Research rating: BUY

^ Hard to believe after the massive run up over the last 13 months, anyway SGM has been a big winner for me and much needed by my super fund, unusual for me to throw 6K at a stock in one hit but so happy i did, my confidence was high perhaps due to the fact that i had been watching for so long.

Lets hope 13.50 comes along quickly again so i can get out, i have no confidence in an American revival.
~


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## galumay (16 February 2017)

A great pick on your behalf SC, I thought you had done well last April when I last posted in this thread - holding onto SGM has turned out very well for you. Why have you set your mind on a sell at $13.50 - is that an 'anchor' created by the previous high or is there something else?


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## So_Cynical (17 February 2017)

galumay said:


> Why have you set your mind on a sell at $13.50 - is that an 'anchor' created by the previous high or is there something else?




$13.50 is the recent top, its enough and i just have no confidence in America being great again...winding up the super account anyway.


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## greggles (21 January 2019)

Hit hard by global trade tensions, Sims Metal Management has delivered an ugly profit downgrade today. The company announced that 1H FY19 EBIT is likely to be more than 12% lower than the year before, at about $109.8 million. 

The market punished SGM following the announcement, sending it down to a low of $8.95 before recovering slightly to be currently trading at $9.06, down 17.26% from Friday's close.

Sims has halved in price in seven months. I expect that negative sentiment will continue to weight on it in the short to medium term given the challenges that it faces moving forward.


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## Miner (21 January 2019)

greggles said:


> Hit hard by global trade tensions, Sims Metal Management has delivered an ugly profit downgrade today. The company announced that 1H FY19 EBIT is likely to be more than 12% lower than the year before, at about $109.8 million.
> 
> The market punished SGM following the announcement, sending it down to a low of $8.95 before recovering slightly to be currently trading at $9.06, down 17.26% from Friday's close.
> 
> ...



In the Earning Guidance Report, SIM has also mentioned that future is bleak. So even if there is a good bash today, I reckon many more pain killers are needed as market reads the report more and action accordingly.
DNH


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## peter2 (21 January 2019)

I hope SGM's bleak outlook doesn't apply to BSL or S32.


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## luutzu (21 January 2019)

peter2 said:


> I hope SGM's bleak outlook doesn't apply to BSL or S32.




I've been waiting for this one. 

Haven't dive into its books yet in case I get tempted and the market pulls down my pants moment I do. 

could be interesting this one.


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## Miner (21 January 2019)

peter2 said:


> I hope SGM's bleak outlook doesn't apply to BSL or S32.



Good point . 
If I may suggest that seeing the business model of BSL and S 32 , they are not on negative side with SIM performance. In fact, SIM collects scrap from companies like BSL. IF they are not getting scrap at good value also means when BSL and alike steel makers look for scrap they would get cheaper. China demand has shrunk and hence probably demand for scraps for electrical furnaces.
S32 is altogether a different company producing aluminium, zinc, coal , manganese etc - not related to SGM's business (I think so).
Good luck


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## tinhat (21 January 2019)

Thanks for the heads up. It's now on the watch list.


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## sptrawler (21 January 2019)

So_Cynical said:


> $13.50 is the recent top, its enough and i just have no confidence in America being great again...winding up the super account anyway.



Winding up the super account, sounds severe. Having said that, I am certainly doing the sums, if there is no franking credits no point in risking capital.


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## Miner (22 January 2019)

Extracted report from Motley Fool quoting UBS today. I request the readers also to refer our one of the ASF's astute contributors  SC's posting #37 of Feb 17, 2017 and  Greg's commentary # 38 on yesterday  as well. Basically SGM is currently not inspiring for many of us.
*"Sims Metal Management Ltd* (ASX: SGM)

Analysts at *UBS* have downgraded this scrap metal company’s shares to a *sell* rating from neutral and slashed the price target on them from $12.50 to $8.50 following yesterday profit downgrade. According to the note, the broker has reduced its price target after cutting its forecasts to account for the tough trading conditions Sims Metal Management is facing. And with global scrap metal markets facing increasing disruption, the broker remains cautious on the company’s prospects in the medium term."


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## Trav. (26 July 2019)

SGM having a nice little run over the past couple of months, one for the watchlist


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## bigdog (16 September 2019)

ASX announcment
16/09/2019 8:20:47 AM  *1H FY20 Trading Update
*
Sims Metal Management Limited (the "Company") today announced that the recent and significant falls in ferrous and non-ferrous prices will negatively impact 1H FY20 and the result will be materially lower than 1H FY19.* 





*
448


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## rederob (16 September 2019)

Miner said:


> Analysts at *UBS* have downgraded this scrap metal company’s shares to a *sell* rating from neutral and slashed the price target on them from $12.50 to $8.50 following yesterday profit downgrade. According to the note, the broker has reduced its price target after cutting its forecasts to account for the tough trading conditions Sims Metal Management is facing. And with global scrap metal markets facing increasing disruption, the broker remains cautious on the company’s prospects in the medium term."



Following on from today's announcement I reckon UBS made a reasonable call, albeit perhaps a bit too negative given our low interest environment and the returns that SGM will offer.
My $9.30 bid to add more SGM just over a month ago got purged, but I am in no hurry to buy again in the present environment and see under $9/share a reasonable re-entry point.


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## So_Cynical (17 September 2019)

rederob said:


> Following on from today's announcement I reckon UBS made a reasonable call, albeit perhaps a bit too negative given our low interest environment and the returns that SGM will offer.
> My $9.30 bid to add more SGM just over a month ago got purged, but I am in no hurry to buy again in the present environment and see under $9/share a reasonable re-entry point.




Under $9 would certainly get my attention, reasonable probability of it getting there with all the global goings on.


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## sptrawler (24 September 2019)

This could be of interest to those looking at SGM, it is a subscription article, but the summary gives the gist of it.

https://www.bloomberg.com/news/arti...p-imports-hit-zero-for-first-time-in-20-years


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## So_Cynical (25 September 2019)

sptrawler said:


> This could be of interest to those looking at SGM, it is a subscription article, but the summary gives the gist of it.
> 
> https://www.bloomberg.com/news/arti...p-imports-hit-zero-for-first-time-in-20-years




No pay wall - https://outline.com/B57BtL

_China’s imports of steel scrap sank to zero last month for the first time this century, a milestone for the nation that’s tipped to turn into a significant exporter in the next decade._

Well that explains it.


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## rederob (25 September 2019)

sptrawler said:


> This could be of interest to those looking at SGM, it is a subscription article, but the summary gives the gist of it.
> https://www.bloomberg.com/news/arti...p-imports-hit-zero-for-first-time-in-20-years





So_Cynical said:


> No pay wall - https://outline.com/B57BtL
> _China’s imports of steel scrap sank to zero last month for the first time this century, a milestone for the nation that’s tipped to turn into a significant exporter in the next decade._
> Well that explains it.



Thanks guys.
Very interesting!
Might see what SGM report in the next 6 months before dangling any more toes in the water.


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## rederob (28 October 2019)

Smashed down in early trade today, with a less than reasonable outlook.
I suspect that very few will be investing in SGM until they announce a clear turnaround some time next year.
The only positive is that they did expect a poor first half, but maybe punters thought it would be better than it was.  
This is not a "bad" company, but they are out of "cycle" and suffering as a result.  
I have bought in and out of SGM over a very long while and will do so again when the "cycle" turns again in their favour.


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## sptrawler (28 October 2019)

Investors will certainly get scared with that report:
*Sims Metal dramatic update*
*By Darren Gray*


ASX-listed metals recycler Sims Metal Management will swing to a first half loss of $20 million to $30 million, the company has warned, driven by a crash in the price of scrap metal. The company forecasts a full year underlying EBIT (earnings before interest and tax) profit of $20 million to $50 million for 2019-20. This would be a 90 per cent decrease on 2018-19 underlying EBIT of $230.3 million.

Sims issued a profit warning in a statement to the ASX on Monday morning, in which it said first half trading conditions were “materially worse” than the first half of last year.

Chief executive Alistair Field said the company had unsold inventory leading into September, which was obtained at purchase prices that reflected the stronger market conditions prevalent in June-August.

“This inventory will be sold at a loss and will impact our results through to December,” he said.

Down nearly 10% as we speak, I guess the China issue is still causing problems?


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## System (20 January 2020)

On January 20th, 2020, Sims Metal Management Limited changed its name to Sims Limited.


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## rederob (24 April 2021)

A long time between drinks and SMG has now turned itself around on the back of booming metals prices.
Last week's announcement was excellent news:
*"Sims Limited (“Sims or the Company”) today announced that it is expecting Underlying EBIT for full year FY21 to be between $260 million and $310 million."*​I was curious about the huge range in profit margin given only a few more months of the financial year is left.  However, in the short term their market remains choppy.
Sims has a low number of shares on issue, so percentage price gains on this stock are always significant.
Could we see their 2008 record high fall in the next few years:


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## Dona Ferentes (16 February 2022)

Sims Ltd has beaten market expectations with results including a 74% surge in December half revenue to $4.265 billion and a near quadrupling in net profit to $253.2 million. In fact, net profit was more than $200 million higher than the net figure for the December, 2020 half alone.

This allowed Sims to *more than triple its dividend *from 12 cents a share for the December 2020 half to 41 cents a share.

Sims said in the release the vastly improved performance was off the back of both higher sales volumes and higher prices with its trading margin improving by 45%.


> “_We delivered an excellent performance in first half of 2021-22 with earnings above guidance, driven by growth in trading margin, against a backdrop of volatile freight markets and inflationary pressures_,” said Sims CEO Alistair Field.




Field says intake volumes grew strongly and were close to pre-COVID levels.


> “_In first half 2021-22 we maintained growth momentum in the core metal business, continued to build adjacent business to further enhance our earnings quality, and strengthened our strategic position across our portfolio of businesses_.”




Management said in the release that the company continues to see strong business performance in the second half, with solid volumes and prices for both ferrous and non-ferrous metals tracking higher. However, it is closely managing the impacts of *freight cost volatility*.


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## rederob (3 March 2022)

Looks like a solid year ahead for Sims:




Also, that $5/share increase over the past month was a blessing to holders.
With inflationary costs starting to build into metal prices Sims recycling margins should continue to improve in coming months.


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## rederob (11 May 2022)

Buy the dips:




Sadly I bought another 1k of BHP yesterday so ran out of credit.

If there is one thing a war does, it creates demand for metals.  That might not be apparent from the huge recent market correction that has crucified most metal prices over the month, but the long game is to invest into emergent demand, so I reckon Sims is likely to revisit the plus $20 range well before year's end.
The other side of the Sims equation is a penchant for recycling in the developed world, and Sims has made good progress in acquiring equipment fit for purpose over recent years.


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