BSL - Bluescope Steel

[tech/a]

I remember it at Under $2
Bought a parcel of 0

 

[Craton]

Cheers for the reply greggles.
I acquired BSL when it was spun out of BHP and later took cream off here and there as it matched onwards and upwards. Took up a couple of rights issues but due to circumstances I was unable to follow the stock and the market on a timely basis and so missed it tanking heavily until after the fact. Still hold a dozen or so parcels showing 10%+ profit and am happy to keep holding.

 

[Craton]

@tech/a, Google Fu informs me that the cost base formula on the demerger was 5.063% for every 5 BHP shares held i.e. 5.063% x $BHP acquisition price x 5. For me it was $1.78

 

[greggles]

BSL testing that $18.75 level today. Volume is average so it doesn't look like it's going to get through it.

Next week?

 

[tinhat]

BSL has hit the 38.2% fibonacci retracement from its run between 07/15 to 07/18. The retracement in price has been despite a 1/4 billion dollar on-market share buy-back which in hindsight wasn't great timing (buying back at the top of the share price cycle).

The next level of support appears to be just under $11 which was held in mid 2017 and which would be the 50% retracement level. If the price reverses before then then the uptrend commencing in late 2012 remains intact.

According to shortman there is only 0.5% of the stock being shorted at the moment. The sell off started with the annual results so I guess someone is getting out. I myself have bloody hands from entering and averaging down through this sell-off.

 

[Trav.]

BSL has hit the 38.2% fibonacci retracement from its run between 07/15 to 07/18.

Thanks for posting this. I have not played with the fibonacci retracement much and I checked out the chart and found that I default to YTD or 1Y on my software. Definitely worth while taking a step back and applying different indicators. Although it appears the BSL chart looks very sick at the moment I will follow and monitor fib levels.

Thanks again @tinhat

 

[Ann]

I glanced at the BSL chart to see what I could see...was there anything interesting? Well yes there was! There is a very rare bearish chart formation called a Domed House or for the purists a Three Peaks Domed House. I haven't seen one of these on a chart since about 2006. Can't remember which company it was now. The purists who do wave counts may disagree. I reckon it is near as dammit to the real deal. Am I seeing things? Well probably, that's what chartists do!

 

[tinhat]

Here is the chart. Remember I'm not a T/A.

 

[Ann]

Really interesting tinhat!

 

[Ann]

I couldn't resist having a little play with the fibbos on my chart tinhat. I have drawn a chart on a slightly shorter time scale to your own six years. Mine is over two years. Bump, bump, bump! My chart does not argue against your chart. Your chart will probably resolve over a greater period of time.

 

[tinhat]

I Googled the chart formation you mentioned. How esoteric. Please keep posting such insights.

 

[tinhat]

I couldn't resist having a little play with the fibbos on my chart tinhat. I have drawn a chart on a slightly shorter time scale to your own six years. Mine is over two years. Bump, bump, bump! My chart does not argue against your chart. Your chart will probably resolve over a greater period of time.

View attachment 90308

Just < $11 looks sweet.

 

[tinhat]

I'm calling the bottom on BSL! I bought some more yesterday. Am I right? It feels like someone has been selling out. Are they done? Will buyers step in and support at these ridiculously low prices? Will global trade concerns continue to dampen sentiment. Let's see.

On the fundamentals this company has a very strong balance sheet, no debt and a strong earnings forecast. The Morningstar consensus forecast for earnings for 2020 puts the current price on a PE of 7x those forecast earnings. Even if sales and earnings were to miss guidance the price is so low, it's a bargain. If earnings were to drop back to 2017 levels, the PE would still be <10x at the current share price.

 

[tinhat]

Oh my goodness. It's a super-duper clearance sale. I bought more today. Trading at below book value. The selling doesn't look done yet. Will supply get mopped up at these prices? There is good volume. A lot of shares are changing hands.

 

[Trav.]

@tinhat I'm no expert but I would keep some powder dry as I can see this going lower. RSI is in oversold territory but MACD is still taking a dive.

I am interested to see if it continues to your 50% fib retracement at around $10.70.

Good luck !

 

[tinhat]

@tinhat I'm no expert but I would keep some powder dry as I can see this going lower. RSI is in oversold territory but MACD is still taking a dive.

I am interested to see if it continues to your 50% fib retracement at around $10.70.

Good luck !

We are there. My earlier calling of the bottom was premature!

 

[Trav.]

We are there. My earlier calling of the bottom was premature!

Mate just unlucky with your call, as the yanks are killing the market all round. We all should enjoy the holidays and wait until the new year.

Cheers

 

[tinhat]

We are at the 100% retracement level on Ann's chart and the 50% retracement level on my chart.

I couldn't help myself and picked up some more on New Year's Eve in the closing auction which turned out to be the day's low. Historically there is good support here stretching back to 2011.

I understand that steel is a very cyclical business and that the market is risk-off at the moment, but to me this business seems like a good buy. It has a very solid balance sheet. Earnings are quite geographically diverse these days too. The US business accounts for the same amount of revenue as the local business.

The CEO is an old hand at the steel business and I like the prudent approach of management towards shareholders. The timing of the further $250M on-market share buy-back couldn't be better.

Currently, the company is reviewing the US opperation with a view to reducing cost, investing in potential debottlenecking and expansion etc. I understand that they intend to update the market on their plans in Feb 2019. In the current risk-off environment, a decision by management to make any significant further investment in the US operations could be a catalyst for further stock price weakness. Who knows. I can understand that many investors will be waiting for further earnings outlook guidance.

View attachment 90304

View attachment 90308

 

[Ann]

The CEO is an old hand at the steel business and I like the prudent approach of management towards shareholders. The timing of the further $250M on-market share buy-back couldn't be better.

Currently, the company is reviewing the US opperation with a view to reducing cost, investing in potential debottlenecking and expansion etc. I understand that they intend to update the market on their plans in Feb 2019. In the current risk-off environment, a decision by management to make any significant further investment in the US operations could be a catalyst for further stock price weakness. Who knows. I can understand that many investors will be waiting for further earnings outlook guidance.

I like buy-backs, it always seems to improve the price level of stocks. Can't say always because I haven't followed all the buy-backs. The exception is buy backs by company directors and other officials. That is bad. It is a kind of way to sell their holdings without being spotted selling their stock, very sneaky. But this is not one of those, this is a good one.
Added to that the chart shows a double bottom. Nice look as often a price rise will follow. Just putting up a no comment chart.

 

[bigdog]

Todays SP went up

Motely Fool reported today
https://www.fool.com.au/2019/01/14/why-the-bluescope-steel-share-price-is-sinking-today/

Why the BlueScope Steel share price is sinking today
Motley Fool Staff | January 14, 2019 |
15 Jan. at 10:36 am

The BlueScope Steel Limited (ASX: BSL) share price is down 5% to $11.56 today despite the US and Australia based steel manufacturer releasing no specific news to the market.

The group is forecasting H1 FY 2019 underlying earnings before interest and tax to come in around 10% higher than the $745 million delivered for the six-month period ending December 31 2018.

As a result of its recent success BlueScope recently announced plans to buy back up to $250 million worth of shares as part of its FY 2019 “capital management program” that includes maintaining $200 million to $400 million of net cash on its balance sheet.

Management estimated it has already returned nearly $850 million to shareholders via dividends and buybacks since the 2017 financial year.

Management has flagged that demand in the US and Australia for its steel and other building products remains robust, with it also having growing building products in China, Vietnam and India. The share price has now lost around one third of its value since August 2018 as investors worry about geopolitical risks, in particular the tariff war between the US and China.