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I wonder how the market would take an announcement regarding a...

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30/08/18

13:29

Post #: 35295347
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Originally posted by tinhat ↑

I am interested in this stock, but as others have said above, debt is a worry. I read that it is forecast to reach 3.3x debt/EBITDA. I don't understand why companies in that situation pay a dividend. With that sort of leverage underlying the execution risk of growth through acquisition it is understandable that the market will be spooked by management missing guidance. The risk from management stuffing up integration and hitting guidance under that amount of debt leveraging is no doubt a factor in the price action. I'm interested in taking a position but suspect that recovery in the share price under these circumstances may be a long-game - confirmation that management can integrate acquisitions, hit targets and pay down debt.

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I wonder how the market would take an announcement regarding a DRP or a complete dividend cut.

SDA Price at posting: $4.22 Sentiment: Buy Disclosure: Held
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