Severfield Share Discussion Threads

[losos] 31/1/2011 11:48

edmundshaw - "but I reckon holding on will work out in the long term, for the very patient."

Sold half (as mentioned in previous post)avg buy price now well below current share price so happy to just sit on these and pickup the divi and will dive in again when it looks appropriate 'tho that may be well into 2011 or even 2012.

[farnesbarnes] 29/1/2011 14:11

jad

At 12p EPS for 2010, the current PE is 19 at 230p. What is a fair PE ratio for SFR? Peers are on anything from 14 to 25, it depends on historical earnings growth and future earnings growth.

The concern is for future earnings here, that is what will drive the share price Where will the share price go from here?

Look at the above figures a little more closely. Two brokers have an average EPS of 8.15p (post trading statement) for 2011.

The other two 2011 EPS forecasts are from before the trading statement.

If you take an EPS of 8.15p for next year and a PE of 19...

However, none of the above takes into consideration the JSW jv and now, Middle East and North Africa, but given the politic tensions, I would discount that.

I will have to look at the Indian figures again to see how much that you could add to profits.

edit - my post 2990, I reckoned the JSW jv could bring in £4m pbt in 2011, however I don't know whether the analysts forecasts are accounting for this?

[jadeticl] 29/1/2011 11:39

In the post above it is clear that analysts are not anywhere close on agreeing what eps will be in 2011, but your estimate of 8p is lower than any Wilmdav, so maybe yours is too pessimistic. However, if shares fall to 200p and the 10p is retained (all analysts agree that it will be!!!)this underpins with 5% divi--not bad in this financial climate. In that case should we hold and be happy with divi until the tide turns? Or sell expecting to buy in at a lower price a year or two down the track, in the full confidence that a MUCH higher share price will be the eventual outcome?

For me it all depends how confident I am of being able to invest the cash (from selling SFR) in a much better company over the two year time frame. Mmmm!

[edmundshaw] 28/1/2011 16:31

BTW I'm out of this for now.

I agree the PE is a bit scary looking, and the repetition of the bad news and the raw numbers in due course are not going to improve sentiment. The delay to 2013 (or possibly longer?) of any recovery is also less than pleasant. I am expecting to buy back in lower, but I reckon holding on will work out in the long term, for the very patient.

Also sold VP after a 50% rise based on the negative construction news. Being heterodox is one thing, swimming against the current is another imo.

[wilmdav] 28/1/2011 16:14

Assuming a 2011 eps of 8.0p, the current share price of 230p gives a p/e of 28.75. That will frighten more than a few.

There either is or is going to be a significant opportunity here. As ever the difficulty is going to be the timing.

[liam1om] 28/1/2011 10:18

Thanks for the article. If this goes below 200p again I think I will buy as a long term hold.

[hyden] 28/1/2011 09:46

That's a helpful update update, thanks for the post jonwig. Buy on further weakness, then. :-)

[jonwig] 28/1/2011 09:12

Plenty of press reporting, but not much new.
An exception - as usual - is the Yorkshire Post's John Collingridge who's spoken to Tom Haughey:

[jonwig] 27/1/2011 13:22

Alexis - that's certainly a positioning which will be in their minds. Of course, 2022 means enquiries around 2015. A bit beyond even my event horizon!

I see there's no mention of Russia (2018) or even European work.

Tottenham's much-criticised plan to pull down the Olympic stadium and rebuild their own (if they get the chance) might at least give SFR a bit of work!

[alexisk] 27/1/2011 13:11

The new Middle East joint venture looks interesting. If the football World Cup really is going to take place in Qatar in 2022 (some uncertainty about that, I know),isn't an awful lot of steel going to be needed for new stadiums between now and then?

Just had another idea -- might look into companies involved in the air conditioning industry.

[losos] 27/1/2011 12:36

edmundshaw - "But then, we may or may not drop further. As I sold half my shares in the last 3-4 months, I am looking forward to the opportunity if the price descends a lot further... "

I sold half as well, will get back also in due course!!!

[adyfc] 27/1/2011 12:05

I wouldn't bet on a recovery in 2012 we're in a depression and it's only gonna get worse. The demise of the dollar will drag the world down with it, thats why the chinese are reducing dollar exposure.

[weemonkey] 27/1/2011 11:55

does anyone know anything about the irish side of this business.

was quit recent add on as far as I remember.

But I have not seen it mentioned at all in the last year.

Anyone know anything ?

[4spiel] 27/1/2011 10:56

Irish company - Irish property market ! British property ! It was OK at 157p - good hold there - with a reduced dividend. Sad you have to sell shares when they are high -who really wants to.A lot of people who have worked in this company and know it are loyal to this company and its been ramped far above its worth. If Ed Balls had his way this animal would have another big spend spend boom and where would that end. Think some have made a bit on this but slow and steady wins the race. India is a fast growing economy but we had a history of exploiting there -in partnership with an Indian company will they let our company get a fair share of the profits or be use as an investment cow - I would really like to be sure .

[farnesbarnes] 27/1/2011 10:46

Geniuses these brokers.

Altium have downgraded SFR to hold, tp 288.

[jadeticl] 27/1/2011 10:32

Is it an error of judgement by management to wait until now to state emphatically that THE RECOVERY will not take place in 2011? It was a hint only on previous statement. Despite the hint, the share price moved up strongly, so we must now pay the price of inflated expectation. How much credence can we place on the confidence that recovery will be in 2012? Or is it simply that 2012 is the year after 2011?

[alter ego] 27/1/2011 10:26

I've been looking to buy for months and have always felt there was too much hope value in the share price The Indian JV will take time to establish so there's not much value there yet. I still think they're overpriced but at least a lot of the puff has gone.

[liam1om] 27/1/2011 10:26

Have to say jak1 is right.

Profit warnings like this are punished and I could see this going back to 200p atleast for the time being.

[jak1] 27/1/2011 09:55

After this mornings update I cant see how anyone could have expected it not to fall! Profit warnings are not taken very good in this market. Think it will drift lower over the coming weeks...

[stevemarkus] 27/1/2011 09:35

I think it's correct. As Jon says, it was quoted as £10M in November. You need to remember this is a new venture, not an established business, so I would see an increase of 50% in a couple of months as being pretty good going. The plant wasn't finished until the latter half of last year.

I also like the new joint venture in the Middle East - looks very promising. If we can just get a little bit more recovery in the UK we could have a good long term hold here.

Cheers,
Steve.