I am not qualified to guide so just giving my opinion. If fair value of something is 3000 it doesn’t need to trade close to it and can be at a 20-30% discount to it or trade in excess of it and something that’s cheap can also stay cheap for prolonged periods. So it’s hard to tell if the fall is profit booking and if it will recover from tomorrow or if there is another 10-15% downside. Nobody knows.
If fair value is 3000 and its available at 2000, its a great deal as it offers a 50% upside (this is the only truth). I believe that this is a good business with great tailwinds but has poor perception from the market (that was the whole thesis for my trade). People who don’t follow this business closely think it’s purely a commodity play - a lot of it still is but there are few premium products and few standard commodities like ACSR which have fetched outsized margins - management has made this quite clear in several calls
The management for its part is stellar when it comes to tempering near-term guidance even when going was great but also thumped up a lot on the tailwinds being decadal - it sends mixed messages but then that’s the precise truth. The participants needling the management on the conductor margins repeatedly were more hopeful of some rope being thrown but management stayed put on the guidance as any conservative one should. If anything I have grown to like and trust this management post yesterday call.
I don’t think the management expected the Chinese to be nimble with Vietnam and South Korea but that’s something capitalism ensures when RoCE is 50%. The energy transition is geopolitics and macroeconomics driven and so is the tariffs (one due to Russia and another due to China) - I don’t think the management or anyone on the planet currently who can predict how these will go and this unfortunately is what will decide the conductor EBITDA/ton - so nobody knows
I feel this business could compound well over time when bought at good discounts to fair value and if that’s your thing, profit booking or where its trading shouldn’t concern you and you should continue to focus on your strengths and your process