Like most on HC, I have been a long term believer in the SGH story, confident in management and their guidance.
My confidence took a heavy blow yesterday.
The CEO pretty much told us that all their key KPIs are running seriously below target, cases coming in are down and resolutions are behind yet they confirmed guidance. I was like WTF - smart businesses dont confirm guidance when they are at serious risk of missing that guidance.
With all the deteriorating KPIs I would have liked to see a break-down forecast by division to show how on earth they were going to hit their guidance, because at this point I cant see how they can possibly hit guidance.
The AGM was a perfect time to provide some more data to everyone on SGS, the main reason that the SP is under serious pressure. But they did nothing. This just adds further suspicion on what on earth is going on in this business.
The managing of investors expectations and providing sufficient information to the market is missing the mark.
This is indeed turning into a debarcle.
I have great confidence that James Millar will be the voice of reasons on the Board and the level head. But with the lack of details provided I'm not so sure now.
The bottom line for me is that the stock is so cheap at these levels I will continue to hold. Of course there will be setbacks and hicups along the way but these need to be managed far better by the investor relations team. Give lower guidance but MEET IT.
My confidence is seriously wounded in the management of SGH now and I am not at all happy about the information provided at the AGM and the sticking to guidance. That was not courageous, it was foolish.
Lets all stop focussing on the SP and daily movements and dive deep into the operations and the numbers. Thats where we will be able to confirm out decision on holding long.
I wish everyone the best.
SGH Price at posting:
$2.68 Sentiment: Hold Disclosure: Held
