Technically, the charts are screaming for a breakout.
In my opinion, the share price should have tanked several times in the last few days, particularly when several larger sell orders had stacked the sell side immediately after taking out the top line of buyers...but each time, apart from a trickle of sellers, the shares have bounced back every time!
Now we have a 32c finish...and given the shares resisted several sell-down attempts...it could turn out to be a significant close!
Someone is bullish for SES, but who and why?
Strangely, it would appear that SES are not too fused about the options money, but I'm sure they wouldn't knock it back if it was thrown at them...and as for the dilution question, I really don't see it as an issue, because even if all the options get exercised, it would be at a fair price and at the end of the day, would still only result in a total of about 84m shares on issue...which is actually still a pretty nice number!
The upside however is that they would suddenly find themselves with over $8m in the bank...and perhaps in a position to go out on the acquisition trail?
When you think about it, SES are in a relatively new, rapidly growing, yet somewhat fragmented industry, which it would appear, is so far without an obvious leader...so rationalisation, in one way or another, wouldn't be out of the question!
Another possibility of course, although I admit I don't know much about their competition, is that SES could also be on someones watchlist?
Certainly an interesting situation.
Fundamentally, I have come to the conclusion that the current price move, if not related to any of the above, might be the result of the market positioning itself for next years increased turnover.
They have predicted that turnover will increase to about $20m, but with their growth strategies apparently ahead of schedule and the apparent quicker than expected take-up of their products, this may well turn out to be a conservative figure.
When you also factor in their current trend of increased margins, next year could well turn out to be much better than everyone is expecting.
As we know, they have predicted $1m profit this year, which frankly, wouldn't support much higher prices...however, the importance if they do end up posting such a number, as I see it, would be one of confidence in managements forecasts for next year!
