Hi all,
I've been lurking here for a while and have noticed the posts re Prudential Steel. Thought I'd add my 2 cents worth, having worked in the steel industry in the past.
Prudential, like many pipe producers, has been extremely busy due to the upturn in drilling activity. One thing to note, however, is Prudential's manufacturing range. My info is not real current, as I left the industry three years ago but at that point in time, Prudential was limited to a 12" outside diameter range for line pipe. This covers off (easily) gathering systems, flow lines, etc., but leaves Prudential out of the market for large diameter transmission lines used by companies such as NOVA, TCPL, IPL. Common sizes I've seen for these pipelines exceed 30 inches in diameter; usually 42", 46" are more common. So if the thought is that the production of new large pipelines will have a positive effect on share price, I'd look at companies such as IPSCO or Stelpipe ahead of Prudential. I know Stelpipe's earnings have been less than stellar, but I'd say that IPSCO is on the right track.
Important items to watch for in the steel sector are product size ranges, whether or not the company is an integrated manufacturer (ie whether it manufactures its own steel skelp and thus has guaranteed supply - Prudential does not since it was spun off by former parent Dofasco), and union contract expiry dates.
Hope this information is useful.
PS - I love this forum. Newport's my favourite at the moment. Have been holding since $3.10. Kerm, what are your latest thoughts on Newport?
- Wendy |
