The issue is not what PE ratio you think SGH should be valued based on the current capital structure - it is more pertinent to think what PE ratio will be based upon the looming heavily diluted capital structure.
Without be armed with the knowledge on the size of the dilution, it is impossible to determine whether today's share price is fair value, below value or over valued.
If the underlying 25-26cent share price support remains - then I think that may give us an indication as to the point at which a discounted CR or equity conversion will take place. Based on the current share price activity I would back a 20cent discounted price for any CR and convertible debt facility.
All of this is of course pie in the sky thinking.
Not long now.
SGH Price at posting:
27.0¢ Sentiment: Sell Disclosure: Not Held
