Most Undervalued stock on ASX, page-4

My honest opinion is at the moment SHJ only has the trading interest of one big player who has worked out it can smash the share price down cheaply, then accumulate on a shock and awe campaign which it has done knowing full well it is undervalued, then it can drop returns of 10-15% several times a year when it rinses through. I bet the company who is doing this is the same one washing their shares today for 80c that they averaged at 70 or under for.
They might be dragging 40-50% returns per year on this with no risk if they believe ( and should) that the stock is worth over $1, well over it.

Everyone else are long term holders riding it out until the $3 true valuation lands when the owners finally decided to cash in.

This stock was value at >$2.50 on a lower EPS than it has now.

IMO

100% they manipulated the reserves in the early years to increase profit and got clipped for it

but

100% they are over reserved right now and worked out that it is in their best interest to pad out the WIP bad debt to hide away profit from tax and shareholders, the problem for them is this pot is now overflowing. There is easy $30M+ in over reserving right now maybe a lot more if you take 100% J&J into account, could be closer to $50M.

What is keeping the big players away is:
1) Majority holding stops takeover
2) Channel of available shares is too low so buying up and taking a position is not worth their interest or they would effect the share price too much.


What SHJ should do to be fair to its shareholders and I hope they are reading this is take $20M cash out, they got less than .1% interest ( $400K from $30M) on cash last year. Do a share buyback upto $1 and earn 7% plus on this money. The biggest problem being like the other big players they would not be able to accumulate enough shares. They probably couldnt even spend $5m on this and would be worried about the further concentration of the big 2's holdings. Every share brought would be well less than NTA and they all have first hand knowledge of the hidden tens of millions in the reserves and ROE in double figures

OR to be really fair to shareholders they should drop an Extra Ordinary 5c divi. by simply bringing reserves back down to 11-12%. If they released 40% of $30M+++ this to shareholders say $12M they would also increase NTA by $20M

Deferred tax liabilities on the company is actually $115M ( they have $23M in tax assets)
115M divided by 30% tax times 100 = $383M The company is telling you if they shut their doors today ( and assuming all run off costs would be covered by new legal bills for existing cases) they're expecting to make $380M profit and have reserved $115M in tax for this already. so they would distribute out $270M of final profit with 30c of tax liability already paid for shareholders

Company growing at 10% + steady for years with $380M of future gross profit from work already done valued at roughly a third of this.............hmmmmmmmmmmm