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08-07-2023, 01:07 PM
Steel is a cyclical commodity which makes CSC Steel (a Bursa company) a cyclical company. The performance of CSC Steel will then track steel prices. And the stock price of CSC Steel will generally track the company's performance.
The Chart below illustrates what I mean. It compares the performance (as measured by EBITDA) and the valuation multiple (Price to Net Current Asset Value) over the past 8 years.
![[Image: CSC-Steel.png]](https://i.postimg.cc/vTrGcn5R/CSC-Steel.png)
I would consider the Net Current Asset Value as a proxy for the liquidation value and a ratio of less than one mean that the market is pricing the company below its liquidation value. To me that is a buying opportunity. You can see this situation in 2014/15 and in 2018 onwards. You can see the business performance moving in a cyclical manner peaking in 2107 and 2022
So you can imagine going in in 2014, exiting inn 2017 and then buying back in 2019. Of course this time the market price in 2022 did not respond to the improved performance in 2022. The performance is declining in 2023 but I would expect an uptrend in the next few years (as it is a cyclical company).
So you should sit tight and wait for the next price peak. In the meantime if you have bought inn 2019, you will have a dividend yield better than the FD rates.
Note that I have an article on CSC Steel in VB.
The Chart below illustrates what I mean. It compares the performance (as measured by EBITDA) and the valuation multiple (Price to Net Current Asset Value) over the past 8 years.
I would consider the Net Current Asset Value as a proxy for the liquidation value and a ratio of less than one mean that the market is pricing the company below its liquidation value. To me that is a buying opportunity. You can see this situation in 2014/15 and in 2018 onwards. You can see the business performance moving in a cyclical manner peaking in 2107 and 2022
So you can imagine going in in 2014, exiting inn 2017 and then buying back in 2019. Of course this time the market price in 2022 did not respond to the improved performance in 2022. The performance is declining in 2023 but I would expect an uptrend in the next few years (as it is a cyclical company).
So you should sit tight and wait for the next price peak. In the meantime if you have bought inn 2019, you will have a dividend yield better than the FD rates.
Note that I have an article on CSC Steel in VB.