Sigma may be supported by the banks but that does not mean they...

Sigma may be supported by the banks but that does not mean they will be protecting equity holders....

I can't see how this stock is worth more than what it is trading at right now... even if you believe underlying EPS of circa 7c, this figure must surely be lower for FY2011, given higher financing costs, losing customers because of their unwinding of the trading terms, and uncertainty associated with whether the Allco transactions will be extended.

On top of that asset sales will need to be made which will also reduce EPS and most likely sold at a massive discount. The board will not be very inclined to do a cap raising and even if they do, it will have to be heavily dilutionary and at a substantial discount (compare market cap vs debt).

IMO the stock will go into the 30s, if not lower. The only thing that would prevent this is if decisive action was taken now to stop the rot and even then the stock will trade sideways.