BSL 0.08% $12.62 bluescope steel limited

Looked strong this morning

  1. 7,397 Posts.

    I found this in my travels through the net today and looked at the market depth and saw a little U bidder trying to pull it down ,
    I do not hold any but keep an eye on this if you like .

    +++++++++++++++++++++

    BHP Steel shares a steal, the directors think

    September 10 2002


    Directors of the country's biggest steel maker were busily buying up BHP Steel shares as many BHP Billiton shareholders were dumping theirs after the spin-off in July.

    And it looks like their confidence is well placed given world steel prices and some new forecasts from analysts.

    Fresh off their promotional tours in support of the July spin-off, BHP Steel directors have been soaking up unwanted scrip at prices around the $2.80 that institutions paid.

    The optimism has been underlined in the past week by reports from analysts, who were under embargo until the end of August after having been privy to internal BHP Steel data before the spin-off.

    Four BHP Steel directors have significantly added to their holdings, with chief executive Kirby Adams the biggest spender, outlaying $588,000 for 210,000 shares at $2.80.


    Chairman Graham Kraehe (30,000 shares at $2.77), deputy chairman Ron McNeilly (25,000 at $2.68) and former Simsmetal chief John Crabb (10,000 at $2.86) have all moved into the market after the shares fell from their first-day closing price of $3.

    Some analysts have released reports in the past week suggesting BHP Steel's share price could hit $3.50 within a year.

    The main driver has been the unexpectedly strong world price for hot rolled coil, the engine room of BHP Steel's earnings. "On the back of significantly stronger global HRC prices, we have upgraded our (profit forecast) from $A257 million to $A413 million after tax," Credit Suisse First Boston analysts Michael Slifirski and Stuart Glazebrook say in their latest research report.

    When BHP Steel directors estimated the company's 2002-03 profit at $US254 million, they assumed an average HRC price of $US230 a tonne.

    But the world price has been hovering close to $US300 a tonne for some months and, with each $US25 increment being worth $A104 million in earnings before interest and tax for the company, BHP Steel could comfortably exceed its forecast.

    The CSFB analysts estimate the company has locked away all its first-half production at around $US280 a tonne, but they admit that forecasting second-half prices is difficult. They point out, however, that the steel price will have to fall by $US100 a tonne in the second half for the company's forecast to be threatened.

    "This appears highly unlikely," they say.

    The CSFB forecast was based on an average exchange rate of 59 US cents. If the exchange rate stays around the current 54 US cents, their forecast would rise to $A456 million.

    The CSFB report was completed before last week's patchy economic news in the US, and this coloured another analyst's impressions last Friday. "There was always a chance the US would go into a double-dip recession, and this week's news makes that more likely," said the analyst, who asked not to be named.

    He said US car production was a major indicator for steel prices, but stressed that last week's strong US vehicle forecasts looked more than ever like an anomaly. "Either everything else will start catching up to that, or the economy will not pick up and cars will fall in a heap."

    He said he was "bearish" on world steel prices, expecting an average HRC price of $US255 for the year, but said this was still above the BHP Steel forecast. "From that perspective, BHP Steel should romp in its prospectus forecast.

    "I've got a target share price of $3.20 on the company."



 
watchlist Created with Sketch. Add BSL (ASX) to my watchlist
(20min delay)
Last
$12.62
Change
-0.010(0.08%)
Mkt cap ! $6.379B
Open High Low Value Volume
$12.39 $13.12 $12.31 $51.85M 4.095M

Buyers (Bids)

No. Vol. Price($)
2 1920 $12.60
 

Sellers (Offers)

Price($) Vol. No.
$12.63 1545 2
View Market Depth
Last trade - 16.10pm 25/02/2020 (20 minute delay) ?
(live)
Last
$12.61
  Change
-0.010 ( 0.62 %)
Open High Low Volume
$12.35 $13.12 $12.33 858916
Last updated 15.59pm 25/02/2020 (live) ?
BSL (ASX) Chart
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.