CSR - CSR Limited

[mr. jeff]

Ok I have looked at the balance sheet etc. and have found some interesting things on CSR. I ampuzzled as to why there has not been more investigation into this stock...
I don't have enough time now to record all the numbers, but the bones of my thinking is this...

sp is 1.74.
sugar contributes 35% of EBIT.
take 35% from earnings and see where you get using a reasonably conservative PE ratio realtive to other companies which compete in the building arena and aluminium arena. (ie. by separating earnings for each division.)

This sounds simplistic but I am having trouble getting a DCF valuation finished; dont want to send the wrong message.

I think that there may exist an unrealised large upside to CSR demerger, with about 800M being injected as cash into the books, and the aluminium business seems to show reasonable returns, as does the building materials section. If you have a look at the PE of Boral (BLD) it is very high, so I think an estimate of 2.45 for the CSR share price, NOTE including sugar earnings contribution for FY11 (now), plus the capital return or share buy back possibility, there is quite a limited downside to this.

Please investigate my shenanigans as I have spent 2 solid days myself and help me form a good picture.
I own these shares already, but the trade looks like a great, low risk set up so far. sorry for the length, will be interested in others opinions; anyone have a good idea about discounted cashflow valuation?

cheers.

 

[mr. jeff]

further to my previous post, (and although it's quiet here) there was an ASX lodgement that an insider just bought 40,00 shares 2 days ago.
also, here is a chart for the ytd.

which shows that there seems to be support at 1.70.
they did an issue at 1.66 so I suggest this is the base line.
Note I own CSR.

 

[noirua]

Hi Mr. jeff et al, CSR's stock price has been held back waiting for final approval of Wilmar's bid to buy Sucrogen. It looks as if this is likely to be finalised late in 2010 and any cash return will probably be paid in 2011.

Meanwhile, CSR continue with their sales program in selling their Naranga, North of Brisbane site for $25.5 million.

At $1.715 CSR are looking strong on a yield of 5%.

 

[noirua]

The BHP Billiton 111% increase in aluminium profits bodes well for CSR as sugar and building profits are also seen set to improve as well. The holdup in the sale of Sucrogen has been more sobering, especially with the election situation being in a stalemate position. Another election within 12 months looks highly likely.

 

[noirua]

I've bought quite a lot of CSR stock and the political stalemate coming to an end should see the Sucrogen deal done and dusted by year end. Stock price trying hard to lift off and should jump on confirmation on the sugar sale go-ahead. A payback of at kleast 50c - 60c a share should be forthcoming earl in 2011, and lots of cash to develop the booming aluminium side of the business.
Still selling off some small interests to add further cash.
Looking good with a yield close to 5% and lots to go for.

 

[noirua]

I've bought quite a lot of CSR stock and the political stalemate coming to an end should see the Sucrogen deal done and dusted by year end. Stock price trying hard to lift off and should jump on confirmation on the sugar sale go-ahead. A payback of at least 50c - 60c a share should be forthcoming earl in 2011, and lots of cash to develop the booming aluminium side of the business.
Still selling off some small interests to add further cash.
Looking good with a yield close to 5% and lots to go for.

All the above came to pass but the CSR stock price remained distinctly unimpressed and languishing at around $1.68.
CSR quite obviously wanted to sell Sucrogen and not float it to shareholders. Basically they wanted to hold on to at least half the $1.6 billion - after taxation - for expanding their building sector and aluminium business.
So cash will arrive now early in 2011 at about 52.3c a share or so.

Confidence in CSR management is below par after the glass investments.

 

[tronic72]

Interested to know what others think of the potential for CSRs shares to jump due to the Queensland floods.

Under normal conditions, sales of Plasterboard are directly related to the production of new houses or commercial dwellings and to a much lesser extent, renovations.

With the floods, I see a massive demand. The company has been quite static recently, mainly due to the lack of new homes been built.

Thinking laterally on this one

 

[oldblue]

I'd expect to see all building related stocks benefitting from the situation as did FBU in the weeks immediately following the Christchurch earthquake.

 

[tronic72]

I'd expect to see all building related stocks benefitting from the situation as did FBU in the weeks immediately following the Christchurch earthquake.

Just took at look on eTrade and there's 4 strong buys I looked at CSR recently and didn't see much interest from memory. The latest update is yesterday.

T

 

[absolute1]

Just took at look on eTrade and there's 4 strong buys I looked at CSR recently and didn't see much interest from memory. The latest update is yesterday.

T

thats down from 6 strong buy reccommendations a couple of months ago on e trade

 

[skc]

Interested to know what others think of the potential for CSRs shares to jump due to the Queensland floods.

Under normal conditions, sales of Plasterboard are directly related to the production of new houses or commercial dwellings and to a much lesser extent, renovations.

With the floods, I see a massive demand. The company has been quite static recently, mainly due to the lack of new homes been built.

Thinking laterally on this one

My 2c on CSR here... don't forget CSR has done ex-div (9.13c) since the post.

https://www.aussiestockforums.com/forums/showthread.php?t=21005&p=602166&viewfull=1#post602166

Overall CSR should benefit from the flood due to increased building activities. But buying building materials after a flood is hardly lateral thinking...

 

[Tekwrek]

Any news of the sudden dive?

 

[wtang89]

Any news of the sudden dive?

The sudden 'dive' is due to the return on capital that has been approved with an ex date on feb 10th for the amount of 43.57c/share.

 

[glk2000]

what happened to todays high? yesterday was still $1.18 and straight away jumped to $3.56

 

[So_Cynical]

what happened to todays high? yesterday was still $1.18 and straight away jumped to $3.56

You probably should be paying a little more attention to your investments.

• Fully franked special dividend of 9.13 cents per share to be paid on 2 Feb 2011
• Capital return of 43.57 cents per share, subject to shareholder approval
• Proposed 3:1 share consolidation, subject to shareholder approval

http://www.csr.com.au/news/Documents/110107 ASX_announcement.pdf

 

[ChaoSI]

You probably should be paying a little more attention to your investments.

• Fully franked special dividend of 9.13 cents per share to be paid on 2 Feb 2011
• Capital return of 43.57 cents per share, subject to shareholder approval
• Proposed 3:1 share consolidation, subject to shareholder approval

http://www.csr.com.au/news/Documents/110107 ASX_announcement.pdf

thanks for posting the announcement... was kinda counting on them posting something on comsec ^^"
anyhoo i'm not really in with this lingo so i'm not sure what it means.... all i've noticing is that they've divided my shares by 3 as part of a "consolidation" which has increased
the share price..

i'm just lost as to what this means for my investment here......

also... what does "def set" mean?

 

[noirua]

Now often forgotten CSR, sugarless now, have bundles of cash sitting there that will even improve their lacklustre glass purchases from several years -- a pathetic purchase.
The building side looks just about on track as is the aluminium part of the company.

 

[Tukker]

Hi Noirua,
I was looking at CSR over the weekend. Chart isn't looking good yet for a recovery. Has there been any report outlining the impact of recycling on the aluminum industry worldwide? curious.

Tukker.

 

[prakashd3000]

Hi Guys,
Writing for the first time. I hold CSR bought at about $3.60, ($1.20*3) just wanted to know if it has any hope and is worth holding or selling off totally and incurring heavy losses.

Thanks

Prakash

 

[noirua]

CSR have drifted down since selling off the sugar side of the business and returning cash to shareholders. Held back after the disappointed glass asset purchase and sales at a loss, but has a good aluminium business and building sector assets. On a yield of 8.4% at $1.54 and debt free, may have been unfairly hammered for too long.