When I see "Sentiment - sell, no stock held." I do wonder. I have really no idea why we get posters like this on the thread. "Dont fall in love with a stock" they say.
Let me make a few points.
1. The drop in the SP is IMO related to:
A. Some instos shifting from small caps to larger ones given the commodity run. B. TA showed a triangle top with a shooting star candle. All techs showed overbought to profit taking and shorting comes into play. C. The market may feel that there is less urgency re finance/offtake announcements - dangerous, expect the unexpected.
2. Fundamentally, you look for:
A. Management. GJ and Guillo are not Johnny come lately speccie guys. They are in the top echelon of resource company executives in Australia. Look at the Board. Look at the investors like the Talbot Group.
B. Potential to be in the top 10 (probably better with further resource definisiton) IO in the world.
C. Govt Support. Ownership of both Cameroon and Congo Govts. They can increase holdings by more dev $ support.
D. Infrastructure. They will be first mover. I agree with Westcott that POSCO is doing something quite different given their nationwide project.
E. EV (Enterprise Value) Still at the low end.
F. Broker Reports. All are discounting heavily for the risk but still coming up with .70 - .85 valuations.
At some time, you need to make a call on whether you believe in the business or not.
I think it is a very big mistake to put SDL in the bucket of speccie hopefuls. A bit more research from newcomers would be in order.
If you are a trader, then you are either ramping or downramping - why else would you bother?
SDL Price at posting:
45.5¢ Sentiment: LT Buy Disclosure: Held
