Ann: Market Guidance, page-46

I've taken a small stake in this today @ 0.575. I'll say upfront I view this as a bit speculative and hence the small stake which will never be increased (unlike high conviction investments which I will keep adding to). I am ignoring their reported earnings and just looking at cashflow, based on the last two years it does seem a little undervalued at this level, unless cashflow has deteriorated (which we will find out soon). I like that they are halting the dividend, it shows a focus on balance sheet strength, and I would hope it is not out of necessity. I do think it's possible the market has oversold this based on the recent sgh experiences. However I see vast differences between the two companies, the biggest one being the disastrous UK acquisition by sgh which has left them with staggering debt and highly vulnerable. I don't think shj is in anywhere near as precarious a position. Debt levels are much lower and appear manageable based on historical cashflow. I would hope though that management stop the acquisitions and focus on getting their current business running smoothly and profitably. SHJ have an opportunity here to learn from the sgh disaster.

I'll be ready to jump ship if more bad news follows (depending on severity), but based on what is currently available I would be looking to hold this until at least $1. I don't think this is a great business, but it has been generating positive cashflow and it's current asset backing plus cashflow versus price looks good.