SG&A has gone up, but they are getting more revenue as a result. They grew at 26% revs, but if you compare it to pre covid it's closer to 12% CAGR. New products online and Amalgam becoming smaller part of their overall revenue mix, they may be able to push that up a bit in coming years.
Meanwhile NPAT looks terrible because of inflation hitting them and the $2.7m of air freight. Take out the air freight and allow for tax, it would normalise to ~$4.4m NPAT for the half. Call it $8.8m normalised NPAT on a $100m enterprise value, that's EV/NPAT=11. Use a Lynch approach of PEG (I'll use EV/NPAT instead of PE for SDI) and you get 11/12 or possibly 11/15 - definitely less than 1. Not terrible.
Dividends reduced to 1.5c for the half, call it around 3.5% yield on 90c stock price. A chowder rule of 3.5% + 12% growth and that's possibly a 15% TSR.
Not amazing, but again not so bad. I am not adding at these prices.. but if it gets to 80-85c, the risk reward ain't so bad for a slow compounder with a strong balance sheet in times of volatility.
SDI Price at posting:
91.5¢ Sentiment: Hold Disclosure: Held
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