SGH 0.00% 54.5¢ slater & gordon limited

If one really wants to make money, page-358

  1. 694 Posts.
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    "There are no analysts I know of that still follow SGH. I'd like to see what those with skills to forward model here think."

    Jim - I don't think any broker based analysts will put any time into SGH while it's still in the very high risk category.

    If you ask them privately, I think the first things they'll say are:
    (a) there's a chance we'll wake up one morning and it will be gone. Something will have gone bad with cash flow somewhere in the business, and they're in administration.
    or
    (b) the banks (to help their own position) may force a capital raising and resulting dilution, after which there is little upside for current shareholdings.
    or
    (c) the banks find a buyer for part of the business (like SGS) and after it's gone, all that's left is the 2 law firms and about $400M+ of debt.

    If the banks have an opportunity to force (b) or (c), they'll take it in a heart beat, and unfortunately the danger of one of these happening may increase for a while as financial performance improves.

    If none of these happen it's just a slow grind towards improved performance, and a race against time to use whatever cash they can generate to pay down debt. A race against time because with the level of debt they have, a serious adverse movement in currency and interest rates could be fatal.

    There is no magic bullet that is going to suddenly restore this to a $2.50 share. I think AG in the recent Kohler interview more or less admitted that what they bought with the Quindell business wasn't anything like what they thought they were buying. The SGH of early early 2015 no longer exists - and it's not possible now with the damage done for it to come back.

    I did a post about a week ago where I gave reasons why I though a FY17 result of 11c per share NPAT would be a likely best case result - it's just an opinion using nothing other than what was available in the annual report, and it could be proved completely wrong if there is a Q1 announcement next month giving a progress update.

    If you are looking for opinions here to help decide what to do with your holding, it would seem wise to have a look at their track record to see whether they have got it right in the past.
    There seems to be no shortage of opinions from people on HC who have got it gloriously wrong for a long time.
    Last edited by mike8654: 14/09/16
 
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