Alright I've been having a dig around Sedgman and here are some...

Alright I've been having a dig around Sedgman and here are some thoughts:

- Management have been through the resource cycle before. This is a 32 year old business and the Chairman has seen it all before. He has major skin in the game to the tune of 16 million shares.

- A very profitable FY12 puts Sedgman on a low PE of 5.7. However, this isn't really relevant on a go forward with the slow down in resources.

- A better valuation metrix I believe is a five year trailing average PE. Averaging the NPAT for the last 5 years gives me NPAT of $23.8m and a PE of 9. Still not overly low.

- The announcement on 26 October 2012 outlines that Sedgman filed an application to the Supreme Court of Queensland seeking interim payment of retention monies, unpaid invoices, variations and bonuses totalling approximately USD$20m owned by Discovery Copper Botswana Pty Ltd under the Boseto Copper Project contract. It is unclear whether this amount was recorded as revenue in the 30 June 2012 financial statements, and if so, whether any provision was made against the amount.

- According to the latest annual report Sedgman had approximately 1,000 employees. The announcement on 26 October 2012 states that 100 employees have been let go in the last couple of weeks. That is 10% of the work force and seems somewhat drastic. It brings staffing levels back to about the level between 30 June 2010 and 30 June 2011.

- The balance sheet looks strong with $92m of cash. Although $15m of this is sitting in China and Mozambique and there is some risk, although low, that these funds could not be repatriated to Australia.

- EV is approximately $150m, taking into account net debt $65m.

The annual report was very enlightening.

I am just new to SDM and this is just scratching the surface of the research I need to do.

I would appreciate anyone that wants to kick this investment opportunity around some more, especially if you have held SDM for a extended period.

Cheers,
C