BSL - Bluescope Steel

[skc]

9% dropped today...it is the time to buy or gonna drop more on Monday as the report release.

Why is it time to buy? Why do you think they are cheap? It's a business that's NOT making money. How much are you willing to pay for a business that's losing money? What are the prospects of the business turning around and being profitable again? How much profits? When? Is it worth the current price?

Go look for answers to these questions and it might assist you with your buy/hold/sell decision.

 

[Joe Blow]

9% dropped today...it is the time to buy or gonna drop more on Monday as the report release.

Edwin, please do not recommend that others buy or sell any stock. Also, please do not ask others for advice about whether they think you should buy or sell a stock.

It is not permitted for anyone on ASF to ask for or provide this kind of specific financial advice.

 

[pixel]

9% dropped today...it is the time to buy or gonna drop more on Monday as the report release.

You could find a hint of a bottom in the chart below, where I have taken the first leg down in the new Financial Year and extrapolated it down. The first recovery back up made it half-way up; I find such a move will often preempt a drop to at least twice the range - i.e. 200%. If that is broken, the regulation Fibonacci levels are my next targets. But as you say yourself: We must wait till Monday and see what happens then. 323.6% is quite a long way down still



PS: Hi Joe, I hope my analysis isn't construed as "advice". ( Nor had I taken edwin's post as asking us what (s)he should do.)

 

[Avneel]

What's the consensus on this one now in light of their announcement to reduce production capacity?? Do you think BSL share price will be able to return back to the levels of seen 6months ago???

 

[notting]

What's the consensus on this one now in light of their announcement to reduce production capacity?? Do you think BSL share price will be able to return back to the levels of seen 6months ago???

It's just a sad story. They cannot compete with international steel makers especially with the AU$ so high. If the price goes up in this environment it's unrealistic. They are just losing money and it’s another manufacturing industry that is pretty much dead. Probably why BHP spun it off years ago.

 

[NewToTheTrade]

where do you see Bluescope in 5-10 years time?

 

[Struzball]

where do you see Bluescope in 5-10 years time?

If I could buy steel imported from overseas cheaper than locally, how much would a local steel maker be worth?

Taking into account a carbon tax, Australian made steel could only become more expensive.

I'd guess the price of BSL in 5-10 years could be anywhere between $0.00 and $20.00 per share.

Note: I don't know anything about anything.

 

[Smurf1976]

The last time I bought steel from Bluescope, they gave me the option of either an Australian product or a cheaper import. Given that Bluescope and Onesteel dominate the steel distrubution industry, it would seem that Blusescope at least isn't overly committed to its own manufacturing operations if they are willing to under cut themselves in this way.

It all sounds much like how Australian Paper / Amcor / PaperlinX wrecked the paper manufacturing industry, closed half the mills and sold the rest, and turned themselves into a distributor of paper produced by others. Thousands of workers out of a job, the economy of a region stuffed, and investors are at last count sitting on a massive 98% loss of their capital. They are now waiting on council approval to completely demolish two of the now idle mills that once lay at the heart of the industry.

The paper industry went downhill once APPM was taken over and the same could be said for steel once BHP got out of the business. The detail differs slightly between the two industries, but the parallels are striking.

 

[tech/a]

I actually import steel on indent with a group of buyers.

Imported steel is around 50% cheaper than Aussi steel.
It's made out of the same raw materials though.
Makes me feel better!
Oh the savings help

 

[PinguPingu]

Anyone up for a bit of List or Hamilton protectionism? :

 

[Smurf1976]

Anyone up for a bit of List or Hamilton protectionism? :

It would seem that many countries are already protecting thier industries through various means.

The so-called "level playing field" simply does not exist anywhere other than in an economist's imagination and the odds are that won't change anytime soon.

 

[Gringotts Bank]

Surely this is a buy now?

I think the market will make some effort to fill in that large gap on Monday.

 

[skc]

Surely this is a buy now?

Why?

Fundamentally I am not willing to pay anything for a company that loses ~$1B each year. The cap raising bought them more time from bankruptcy... I am struggling to picture a scenario where iron ore and coal prices will fall while steel prices remain high.

There may be some short term proping up just to get the retail holders to join the rights issue, but I doubt it will hold up against the tide.

Technically there's only the gap but not much other evidence...

 

[pixel]

323.6% is quite a long way down still

But reached it was.



Then it offered some support, even a bounce back up that gave rise to a new Fibonacci study like this:



The first Fibonacci level may become holding support; but sadly, 161.8% is the target that gets hit more often. And that's at 12.5c - so far outside the picture that we better leave it there for the time being.

 

[TMC93]

If the aussie dollar dropped significantly, would it have to drop to 50 cents for it to be just as cheap for local steel makers than imports? Or am i missing something?

 

[Smurf1976]

I heard a commentator on Financial Sense Newshour a while ago saying that Chinese steel production is continuing to boom but that consumption is not. His argument amounted to saying that they were keeping the mills running flat out so as to create employment but weren't actually selling all the steel they produce (presumably it's just piling up somewhere).

I don't have any further details sorry so make of it what you will. Maybe he's right, maybe not but I'd be doing some research into this if I were investing in steel or iron ore companies.

 

[Taltan]

Rights Issue tommorrow.
I have a problem with not buying at 40c if someone else is paying 42.5c.
I also have a problem throwing money at a company losing money without controlling how it can turn that around.

Is someone artificially keeping the price at over 40c?

Any thoughts, ideas or comments appreciated

 

[Wysiwyg]

Look at 'em all stacked trying to catch a swing up in this perennial down-trender. Unreal isn't it, though I used to play that game too.

 

[skc]

Rights Issue tommorrow.
I have a problem with not buying at 40c if someone else is paying 42.5c.
I also have a problem throwing money at a company losing money without controlling how it can turn that around.

Is someone artificially keeping the price at over 40c?

Any thoughts, ideas or comments appreciated

Short the BSL ~ 42.5c and sbuscribe for the rights... a guaranteed 2.5c...

If you have enough rights to cover the brokerage, that is.

 

[prawn_86]

Up 50 odd today after their report. Apparent JV deal with Nippon Steel seems to have the market excited