Ann: Trading Window Update, page-17

Price action is due to a single seller who, yes, seems to have the sh*ts with management's decision to sell down.

There are only 5 personnel with shares; two of those own nominal amounts and of the remaining 3 one isn't selling. The other two (holding about 4m and 2m shares respectively) are only going to sell 25% max. Bear in mind that the CEO (who owns $4m) was a buyer of stock on market last year at 84c so that might give you some idea of the point at which he is a seller.

No reason to think they won't do 13cps again this year (hard to grow again following such high growth last year). Sure they are not going to shoot the lights out but their G-shock stores are actaully quite impressive when you see them and there is plenty of scope for further rollout of these. Although consumer products makes up 75% of ebitda the watches are only 1 of many products (albeit the biggest). Plenty of scope for a better performance from appliances this year. The company has been around for ages. It clearly keeps costs tight and respects shareholder funds.

I always reckong that once you get below 7x earning you don't need a company to grow. They have long history of innovation so no reason to think they can't at least potter along at 10-15cps. Very strong balance sheet means they have ability to grow earnings inorganically.

Best advice on director selling comes from Peter Lynch in One up on Wall St when talking about an instance where he sold due to director selling before remember that this was "a terrible reason for selling a stock, they may need money to buy a new house, pay off a debt, or simply want to diversify their investments...etc"

A similar stock in terms of selling fairly low-rent consumer products is MCP. i challenge someone to show why this stock shouldn't be trading on a higher multiple that that thing (they are both earning about 13cps). That along doesn't mean SHM is cheap of course but i reckon it will pay 8c ff dividend this year which puts you on a grossed up yield of 14%+ if you can buy under 80c tomorrow.