Thanks JD2. Historically OCF has been much stronger in the second half than the first, so it is quite likely the cash flow issue will be sorted out organically.
I've sent an email off to the company just to double check a couple of things. My feeling is that as the company is transitioning away from manufacturing products where input costs are largely out of their control (primarily the price of silver), gross margins can be controlled more accurately and will grow in the future as amalgam makes up a smaller proportion of SDI's product portfolio.
It was very pleasing to see non-amalgam products pick up the slack for the decline in amalgam, and if that continues then SDI will represent amazing value moving forward. That is my main question for management; will we see that shift continue at a pace where we don't see a dip in revenue?
If so, we are potentially looking at SDI right now at the beginning of a phase of high growth where the years of R&D they have spent will come to fruition as high margin products and a business not at the mercy of the commodity markets.
SDI Price at posting:
54.0¢ Sentiment: Buy Disclosure: Not Held
