BSL - Bluescope Steel

[johannlo]

That's nice and all but considering that in the good times NPAT was over 800 million p/a, 20 million is a drop in the tank.

still better than another share dilution

 

[johannlo]

Here we go the predicted 2 dollar level....

Glad I didn't get too cheeky when it was holding at the low 220s earlier this week!

Interesting (if depressing) article on commodity prices in today's Australian

http://www.theaustralian.news.com.au/business/story/0,28124,25479766-5005200,00.html

Read somewhere else (sorry can't remember) on how prices are now back to 2006 levels but in 2006 obviously the outlook was much rosier. Food for thought esp for those who went long on small-mid cap miners in the last few months...

 

[M34N]

$2.00 level held today, looking very weak. I think this is the lowest closing price in BSL's history (last time I think it was $2.05 or $2.08, can't remember)... so hard to be positive on it. I think $1.80 is possible soon, and ultimately $1.60 is the lowest I would expect in this leg down at least, unless things turn ugly fast.

But definately looking at this one and keeping an eye, I posted a few weeks back about $2.00 being vital support and if that breaks, I would be worried.

 

[Gamblor]

I've got my order in at 1.75 and even then I'm starting to think about pulling it. I just can't get over the fact EPS has basically just halved.

 

[oldblue]

I've got my order in at 1.75 and even then I'm starting to think about pulling it. I just can't get over the fact EPS has basically just halved.

That's what happens to cyclical stocks in the down cycle. Perhaps the more incredible part - now, that is - is that the SP got so high at the top of the cycle. Hindsight is a wonderful thing!

 

[johannlo]

They do have a lot of costs that haven't come out in the wash yet (equipment end of life etc.) and there is still an incredible amount of steel stockpiled waiting for the price and demand to recover. Its very much the long haul now even for us fools who though we were bottom picking in the mid 2 dollar range

 

[bonkerrs]

If you don't participate you'll have your original 4,000 shares at an average cost of $2-65 and your entitlement to the 4,000 @ $1-55 will lapse and be gratefully received by the underwriters.

If I were you and I could afford it I'd be taking up the 4,000 @ $1-55!

Check out the direction of the SP today! Received my docos from BSL last Friday and have been thinking about this all weekend - to participate or not?! I'm really up in two minds about it.

I guess I can sell what I have now and buy the allotment at 1.55. Trading at around 1.875 at the moment.

 

[johannlo]

That is a good idea bonkers, also you get to realise your capita loss for this financial year. Might just do that depending on which way the SP blows over next few weeks.... now for those darned docos to get here

 

[bonkerrs]

That is a good idea bonkers...

Following alphaman's suggestion from an earlier post!

...also you get to realise your capita loss for this financial year.

Capital loss... how do you know I will make a capital loss

 

[johannlo]

Granted it was an assumption which I didn't pause to think about but since SP is at historical lows right now percentage wise it wouldn't have been too risky an assumption. Still point taken. Lets just leave it as 'good idea ' lol

 

[mastatrada]

I just sold at 2.04 after buying at 2.29, a bit of a pain cancelling out a previous bit of day trading I'd done from 2.25 to 2.42 but yeah I reckon 1.60 is a realistic price as the dilution at 1.55 gets underway

 

[bonkerrs]

no worries johannlo. you were right anyway.

Am I calculating correctly?

5000 @ 2.680 = 13,400.00 - Bought at originally
5000 @ 2.100 = 10,500.00 - Sell at example SP
= -2,900.00 - Loss (from original SP)

5000 @ 2.100 = 10,500.00 - Sell at example SP (as above)
5000 @ 1.550 = 7,750.00 - Take up BSL offer
= 2,750.00 - Profit

So my profit is 2900 - 2750 = 150.00 before I sell the offered amount?

I'm confusing myself!

 

[johannlo]

I think you're right.

I'd hedge it personally and sell half, so in effect you're resetting the your win/loss back to 0 (for all intents and purposes, give or take a few hundred bucks), in three years you should have made a nice bundle.

Meanwhile you can take the other half and go aggressive.

That's what I'm going to do anyway assuming SP holds at around 2.1 and the markets continue to recover slowly.
If it looks like taking ages to recover SP or gets even worse then might sell the lot at the low 2s.
If it looks like recovering quick (charts, iron ore prices, demand, china + japan economy, etc. etc.) then might only sell 1/3rd or even not at all depending.

I like to hedge my bets lol

 

[MACCA350]

I considered the above approach, but I initially baught BSL for a long term outlook and that hasn't changed so I simply took up the entitlement offer and stuck them back under the pillow

Personally I'm not a strict daytrader, I do have a percentage of capital which I use for short term trading(anywhere from a day to a few weeks). The rest I treat with a longer term investment outlook........Guess you could call me a Hybrid trader

cheers

 

[ozbecool]

no worries johannlo. you were right anyway.
.... So my profit is 2900 - 2750 = 150.00 before I sell the offered amount?

RE: Bonkerrs #2523: I think this will be not $150 profit but $150 loss + more loss from broker fees

But your approach has its merit - on 09 June 2009 when NEW SHARES start trading there will probably be enormous SELL pressure - all of a sudden twice as many shares on the market and 1/2 of them bought at $1.55 !!! And the price will be lower than before 09 Jun.

I will actually do the same - I will sell soon; price would probably not go much higher than $2.10 - at least not in coming weeks.

Also remember that you can subscribe to more than you are entitled to (the bad thing is that you have to pay up front for additional shares, yet you might not be alloted all / any - but in that case BSL will refund the money to you).

 

[johannlo]

I'm betting that I can locate something that will grow faster than BSL will recover. So sometime before the 9th I have to make a decision whether to go long term with the entire stock or take a short term hit, cushioned by capital loss writeoff, and hitch my wagon to something else. Of course if you go with the doom and gloom then holding the cash and seeing what happens is always a 'safe' middle of the road option.

This is a very real option in my mind as the recent rally then clawback has taught me some good lessons. If you're conservative then I agree that in the long run you can't really go wrong. I'm heavily influenced by my belief that there is a lot of factors yet to be put on the table which I don't want to get into in case I break forum rules for ramping or the opposite., and at the same time (assuming you don't believe they're going broke) there is no downside long term EXCEPT FOR THE FACT that your money could be doing a heck of a lot better somewhere else.

I agree with above poster that the price will take a major hit in the short term after the new shares go on the market. Hopefully the fluctuations will give us a better exit point than the current SP, even if its only 5% more or so. There are still two weeks to see which way the wind is blowing, both for BSL and the other stocks you may be watching. Interesting times indeed

 

[talktome]

Subject: Update on BSL's Fire

Back in operation within 6 weeks doesn't sound too bad. Loss of $7-$10 million revenue as a result of the fire and a total cost $27 - $36 million.

I'd see BSL getting back to +$2.30 very soon.

Any views out there?

talktome



ASX Release
Release Time: IMMEDIATE
Date: 25 May 2009
UPDATE ON PICKLE LINE FIRE
AT BLUESCOPE STEEL’S WESTERN PORT PLANT
The principal damage from the fire at the Western Port Pickle Line facility is limited to the
four pickle tanks and to the roof of the building. Other equipment in the Pickle Line building
was largely untouched by the fire.
The roof of the building has now been made safe and debris has been removed. The repair
work has begun, and investigations into the cause of the fire continue.
Four replacement pickle tanks, recently decommissioned from BlueScope’s Packaging
Products facility at Port Kembla, will be transported to Western Port for installation on the
Pickle Line. These tanks were installed at Port Kembla in 2006 and have a life expectancy
of at least 15 years.
BlueScope expects the plant to return to operation within six weeks, and that a capital cost
of between $20 million to $25 million will be incurred. An impairment charge of
approximately $7 million to $10 million will be taken on assets destroyed or damaged by the
fire. A one-off pre-tax cash earnings impact of between $7 million to $11 million is expected,
principally relating to foregone sales and additional transport costs associated with
alternative production sourcing.

 

[bonkerrs]

RE: Bonkerrs #2523: I think this will be not $150 profit but $150 loss + more loss from broker fees

Actually, it would be making a lot more profit then my first posted calculations.

Like this:
Entitlement: 1.55 @ 5,000 share = $7,750
Sell my shares now: 2.15 @ 5,000 shares = $10,750
Profit: $3,000 (gross)

And I'll still have my original 5,000 shares for long term prospects.

 

[johannlo]

Don't get your hopes up too much LOL until we see what happens the first few days when the issued shares come online, I'm sure we're not the only ones thinking along those lines...

V nice bump today though (sentiment from Rio/Japan iron ore pricing agreement?)

 

[bonkerrs]

Don't get your hopes up too much LOL until we see what happens the first few days when the issued shares come online, I'm sure we're not the only ones thinking along those lines...

V nice bump today though (sentiment from Rio/Japan iron ore pricing agreement?)

Could be done right now.. sp 2.20 at the moment.
But as usual, I'll probably wait and see inaction is my forte