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Companhia Siderúrgica Nacional Message Board

  • chiquitbumbalabimbomba chiquitbumbalabimbomba Aug 14, 2013 11:05 AM Flag

    This is a high-beta stock in a high-beta country

    with a long tradition of screwing minority shareholders; it shouldn't be more than 4 or 5% of your portfolio.

    If you keep trying to hit home runs on every trade, eventually you're gonna strike out permanently.

    Sentiment: Buy

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    • Since you don't have a clue about how they treat their stockholders, get off this board. CNS is the most friendly stockholder company I have ever owned. They are required by Brazil law to return at least 25% of net profits to the shareholders, and they do. I have held the stock for 7 years and they average 6% annual div.. The dividend comes in the form of irregularly declared dividends and also payments of *interest money on the equity* they hold for the shareholder. You have to pay a 15% Brazil tax on it, but when you subtract that cost, the dividends and "interest payments" still average 6% yearly. This company also does the following for shareholders: they buy back stock but then destroy it from their total float. They used to have 1.5 billion ADR shares, now it is down to 1.46 billion because of those buybacks and stock destructions. I don't know of any other steel company that destroys shares they buy back. Do you? Lastly, they do acquisitions, but don't overpay for them. They have lost three potential deals in 7 years (now including the Thyssenkrupp deal) all because they bargain for their price, or no deal. They don't have "goodwill" losses on their books. Recently they wrote off huge loss in stock losses as they tried to take over a competing steel company, Usiminas. They did a "mark to market write off" in 2012 for the 30% ownership of that company that they controlled in stock; their subsequent accounting numbers were badly skewed so CSN has taken a beating compared to other Brazil steel plays. But that story has not ended. CSN has sued the company that won the takeover battle; those losses may return to them because they had a stockholder agreement that was breeched when Usimnas was taken over. If CSN wins that lawsuit, they stand to get 80% of that huge write-down back.
      None of this sounds like they don't take care of their stockholders to me. A company that has 50% inside ownership takes care of their own stockholders too. Let's hear your rebuttal.

      • 1 Reply to grmabar
      • My reply is: Be my guest, put your entire portfolio in this stock, it may work out once but if you keep doing that with stocks like this, eventually you will probably lose everything.

        I was born and raised in Brazil, I know how Brazilians think. Some are honest but there is a general culture of dishonesty. For many, life is a little game to see how badly they can screw each other and the public coffers over.

        The Usiminas ADR has already gone from $3 to $4,25 in the last 6 weeks, my guess is the "mark to market" is already largely priced in to the recent rise in SID.

        Sentiment: Buy

    • Several people talk about their "tradition" of screwing shareholders. Yet no one ever gives actual examples of how they did this. Can you please provide some concrete examples of how they screwed them?? Losing value in a down market or when the country is in turmoil are not examples either.

      I'm not saying what you say is untrue, I've just never seen an example of that, and I have been following this company for quite some time.

      Sentiment: Buy

      • 1 Reply to ema0203
      • Petrobras recap in 2010, special dividends, messing with voting rights (special stock classes) issuing too much debt, insider trading (for example, I knew about the BK acquisition by the Garantia group 4 months before it happened, it was an open secret among the well-connected, though I didn't trade on it) etc.. as well as general issues with kickbacks under the table for anything and everything, price fixing, lax enforcement of securities laws, byzantine legal system, etc ,etc

        I did not say SID in particular, but the general environment helps condition the behavior of all.

        Brazil doesn't have a tradition of independent and aggressive financial journalism, or maybe the journalists are too busy already with the politicians, so it's hard to find links to this stuff.

        Sentiment: Buy

    • Okay, I see maybe your previous post to me was you trying to get me not to LOSE money-thanks.
      I've been trading stocks from 1999 and have done great..........My worst week was after they opened the markets after 9/11/2001, and in 2008 right before that disaster I was mostly in CD's. Right now, I have about 5X more cash than I have invested SID because I know they go down too so I am not buying right now. I have more than 80K shares of SID!

      The last time I was in SID, I had just 15K shares so the position tells you have I feel about the stock...........I am watching the currency which is helping, googling iron ore price since I don't have access, and know that the Brazilian economy is better than the USA's because unemployment is like 6% there, and they have inflation which means people are spending.

0.9802+0.0362(+3.83%)Oct 2 4:04 PMEDT