Mike I dont disagree that SGH has been kicked from here to...

Mike

I dont disagree that SGH has been kicked from here to uggery. but you know I know and anybody with half a brain knows :

1. A write off of Goodwill is a book entry
2. Turnover , Margins , are unaffected by GW write off
3. Paying down debt must be high on the agenda and whether good , bad or indifferent are the NIHL outcomes - the likelihood is for a material slug of net cash is likely to flow from NIHL in 2017.
4, Discounted debt trades could be a treasury risk management exercise and we dont have the big picture on that so it is just mist.
5. Of course the ASIC investigation could be bad, but it is a tad unusual for a professional firm in the public eye to be on the fiddle. I grant you we dont know but there is a possibility that it is more dotting I's and crossing t's. Time will tell.
6. Every turnaround book points to a need for a samurai and pare back so that the cleaned operation can move forward. You don' t need to be an accountant to work out that 10-17% net margins will ensure good profits because we can all work out the fixed costs. I am expecting high 9 figure future net profits.
7. The class actions - 9 fig future net profits should deal with them - lets see how successful a class action is in attacking a goodwill write down.

8. Its smaller competitor ( to SGS) Redde plc has been through the mill - done the turnaround and is valued at 21 times net profits after interest and tax. I am sorry but a valuation of less than one times profits for SGH is absurd unless it can not pay down material dent in the next 18 months. There is evidence to suggest it can and will,

Let's see how the market reacts to approaching material debt paydown and obvious profits approaching nine figure dollars and Scotland taking down some white knickers at Twickers.

SGH in its current damaged mode warrants a forward PER of 5 or more.

Where's the truck ?

Mel