STTX

**hanch** Wed Jun 08, 2005 6:33 pm

STTX
I am not experienced in value investing. However, I believe this is the golden method for profiting from the stock market. :D

I did some quick screening to stocks and came across with STTX. After looking through its financials, I found it attractive in the value standard.

STTX is currently selling at around $19, well below its book value of $24, and close to its working capital. The P/E ratio is less than 5. Last year it had record sales and income. Its current ratio is 3, well in the comfort zone.

It has a current dividend yield of a little more than 1%. The dividend seems small compared to its earnings, yet the dividend never interrupted in the past 15 years.

I don't know why it had some drastic declines early this year. My guess is that the raw materials price was high, and that may have negative impact to its profit margin. I don't know how much effect it will have.

My feeling is that this stock may be worth holding. Yet I guess there might be other stocks that may prove to be more valuable, like the ones that Blast is currently holding.

I'd like to hear from other people in this group on this stock. It is very valuable to learn from each other.

**blast_investor** Wed Jun 08, 2005 6:45 pm

hanch,

I would be cautious on steel stock like STTX. STTX past earning was excellent because steel price hit all time high last year. The rising steel price was due to China's booming economy mainly. China consumes more than one third of world steel supply and is the number one steel consumer in the world right now.

However, China now is under government crackdown on its real estate bubble and capital over-spending and its economy in real estate and big project is slowing down.

I am not optimistic on the steel price because of the situation in China. When China economy can not support high steel price in short term, so goes the STTX earning. I expect STTX earning will be in turmoil in short term. Steel is extremely cylical business.