If by aggressive you mean unflinchingly holding people to account for their unfounded claims, then yes, there was a fair amount of diligent oversight provided yesterday. That said, I thought it was all conducted in a pretty civil manner.
Hmmm... an interesting slant on the events...
I know it can be hard to follow when someone posts two replies. For your convenience here are the
links to Grant's responses to your point about receivables and payables.
In the first post (
https://hotcopper.com.au/posts/23872224/single) he raises a very important point about items which will materially impact cashflow - cash payments due to Nowicki Carbone and others.
In the second (
https://hotcopper.com.au/posts/23872428/single) he gives a thorough analysis of the issues SGH are having in COLLECTING receivables. Payables are 100% due. Receivables are not collected at 100% (bad debts, stale accounts etc.) From June 2016 to Dec 2016, they reduced (collected) Receivables by $54M but Payables by only $33M. CREC is clearly not converting at 100%. This directly impacts cashflow - and also directly responded to your explanation.
Look in a mirror much?
Fantastic. The formula for discounted cash flow is:
|
Column 1 |
| 1 |
PV = CF1 / (1+k) + CF2 / (1+k)2 + … [TCF / (k - g)] / (1+k)n-1 |
Where:
PV = present value
CF
i = cash flow in year i
k = discount rate
TCF = the terminal year cash flow
g = growth rate assumption in perpetuity beyond terminal year
n = the number of periods in the valuation model including the terminal year
Based on your expertise in this area, what is your calculation for PV?
Obviously you can't use current cash flow for year 1 as a NEGATIVE cash flow will not give you the answer you are hoping for. So pick your own numbers for future cash flow - just remember to justify any assumptions you make with reference to actual facts. The SGH announcements and financial reports are where I like to start for this. Look forward to your calculation. Good luck!
We agree here. The value is NOT going to be $0.115 per share. You have been saying this all the way down from at least $0.35 by the way.
At some point might you consider the
possibility that you are
over-valuing your SGH shares?
Whatever the company and it's staff are up to - whatever good works they might be performing - has no material effect - ZERO - on the outcome of the recapitalisation.
To answer your rhetorical "Where else could they go?" - I believe there are other law firms in existence.
OK - waiting may prove costly.
What if past performance IS a guarantee of future performance in this case? What if the experience of other companies going through recapitalisation is exactly what happens for SGH - and D4E is done at a discount to today's market price and current shareholders are heavily diluted?
What if you could predict with a high degree of certainty that this was going to happen today - before it happened...? Would you still want to wait...?
Are you the figurative captain determined to go down with the ship, or are you making rational investment decisions?
Only you know the answer to this - but your statements read like someone trying to wave away any possible scenario except the one where you are rewarded for your blind loyalty to this stock - and sadly, the market doesn't reward loyalty.
Clearly - though this strong belief seems to be based on the
hope that a vulture fund is going to pay over-the-odds to take on an equity position in exchange for debt reduction - and that current shareholders will be left holding enough of a remaining stake to share in any meaningful way in the upside once the recapitalisation happens and the company is eventually turned around.
The observation I will make is that there is an extreme level of hope driving this sentiment - not usually a good thing in investing.
The current financials and respective negotiating positions of the senior debt holders and SGH do not give me any confidence that any recapitalisation will leave much more than a token amount for current shareholders. This is my opinion - however it seems a reasonable conclusion drawn from all the available facts.
All the above is my opinion drawn from available facts, experience, expertise and research - both mine and other posters. Any assumptions made have been clearly identified as such.
Don't rely on anyone's posting on HotCopper - mine included. Do your own research. Draw your own conclusions.
If you have the courage of your convictions or even just want to clarify something you don't understand, I encourage you to post for others to comment on and offer help. There are some genuine experts here who share their expertise freely, which I appreciate. It's a great way to learn and to check yourself for confirmation bias.
Looking forward to your Discounted Cash Flow valuation SWC.
