The volumes being traded are relatively small. Really big holders are not participating in this market, except perhaps picking up more shares by buying the smallish parcels on offer. I think that what we are observing is a great deal of "trading" by those with short-term horizons. Some should be making up to 20% over just a few days, and an equal number losing exactly the same. As a long-term investor I am trying to keep calm about the current fall in price, and pick up some extra shares. Unfortunately it is too difficult for an outsider like me to calculate a reliable "valuation" for SAS shares. Therefore I am stuck with backing the big boys who obviously thought it was worth at least $0.12. Here is a calculation, for what it is worth. Expect revenue to SAS pa of $800m -$1b. Assume very conservative $500m, assume even more conservative 10% margin, gives $50m earnings (profit) pa. Lincoln states that market cap is $200m or 1.6b shares at 12c. ASX says 1.8b but that would be before this recent offer of at least 123m. Add more shares from raising and options, say total is 2.5b. Then EPS would be 2cps and value at PER 15 would be 30cps. That seems all quite pessimistic. Any views?
SAS Price at posting:
8.8¢ Sentiment: Buy Disclosure: Held
