TSL - Tree Island Steel

[Guest 50centdollars]

Hey Guys,

 

I thought I would throw this one out there and see if anyone covers it. Tree Island Steel operates out west in BC. The company seems to be turning the corner as they have been a dog for the past 5 years. They were a $15 stock in 2007 right before the crash, now trading at $0.89.

 

Insider buying has been fierce the past few months:http://canadianinsider.com/node/7?menu_tickersearch=tsl

 

Has anyone researched this company or has any experience in the steel industry?

 

Cheers

[jwfm1985]

Have followed them a bit, but not enough to really be smart on it. It's a pretty awful business to be in: low margin, commoditized product with a ton of price pressure from overseas manufacturers (especially when you are operating out of BC, right by major ports).

 

That said, the stock seems somewhat cheap and the guy who runs Futura Corp knows what he is doing in the building materials space...

 

just my 2 cents

[Guest 50centdollars]

Ya I noticed Futura corp bought 4 million shares the other day. i think they own 20% of the business. The company has essentially done nothing since the recession but management is obviously bullish on the company when looking at stock purchases. They are trading at around .1 times sales. Is it possible for them to cut raw material costs so the sales flow right to the bottom line?

[gary17]

futura now owns 30% based on this -

 

http://www.treeisland.com/snapupload/2013-11-14_TI_Acquisition_of_Shares_by_Futura.pdf

 

i looked at posco before but didn't like the idea because of uncertainty with the raw material costs - mainly coal & iron ore.

 

tree island appears to make interesting products that can't really be replaced based on the construction practice of today, although i'll say newer homes tend to have rains screen so the need for wire mesh for stucco might be decreasing... but that'd be wetter climates only.

 

 

[Guest 50centdollars]

I think Buffett owns Posco.

 

The CEO of Futura Corp, Amar Doman, is the chairman of the board for TSL and is also the CEO of CanWel Building Materials (CWX-T). CWX buys products from TSL.

I've been going through TSL financials for the past 5 years and its been a shitty business. Some quarters results are good and some not good.

 

Stock appears cheap here though.

 

Stock Price: $0.89

 

Book Value: $1.10

P/B:0.81

P/S: 0.13

EV: $46.92

EBITDA (trailing 9 months): 6.2 million

EV/EBITDA: 7.56

 

Current ratio: 2.08

 

Its a pretty shitty business but i Know before the recession this was a $15 stock. Whether the market was valuing the business correctly back then I don't know. But, why are insiders buying this stock in droves?

Does anyone have any research reports on the steel industry? I thought I read somewhere the Goldman Sachs upgraded the steel industry.