I been looking at the financials of this company, and on paper they look like they are running a good business. Trading well below NTAV, low PE. Good set of interim results. Worth a punt in my books. omo
I took a punt but am planning to offload at a loss. The reason for their good interims was that there was a serious supply constraint in the local steel market because of issues at Arcelor. The small guys got a bit of a windfall out of this. Problem is that this has been rectified now. (I got this out of BSS' own earnings reports, so not sure exactly how true or significant it is, but the price says it all)
Businesses like this are run on working capital, become working capital intensive (have to carry large amounts of stock) and thus have very low free cash flows... Hence, DCF's of businesses like this imply low EV/EBITDA and PE multiples. Roughly fairly valued at these levels per my workings.
This is one of the first shares that I bought. From the beginning the company showed good signs, but this is not reflected in the share price. Ivan Clark's company owns slightly ore than 70 million of this share,and every now and again he buys by the millions.