Im think you're all missing the most probable factor, and that is stop losses. The huge long red candle gives it away. You can never tell where all the holders have set their stops, thus you cannot predict the depth of the fall.. In this particular instance its clear they are set over a wide spread. So why would people have a stop set, say under $5? For no other reasons that they forgot to move it up as the price went up.
So if you think about it, the perfect storm is created when a large number of stop losses are setup in a particular sequence to create a domino effect. A 38% drop for an ASX 300 stock is generally rare when it reports a
24% increase in Revenue for the same half year period last year.
underlying EBITDA increased by 14% for the same half year period last year.
the revenue increases for most arms of the business look good. Ok, net debt increased 10.8% ($42m), but this is just one years NPATA which of course is growing YoY. The extra debt will not be liked by some and result in a drop to the SP, but overall I dont see any glaring issues. Take a look at the debt levels of STO and ORG - Billions! but those stocks are doing well overall. Size of debt is one thing, more important is how it is serviced. I think SDA has a good track record of fiscal prudence.
Some shorters may have had this pegged for a fall given the debt levelsand the Half Yr Rpt being due today, but they seem to have made some fairly hefty covers during the post trading auction ($1.2m, $1.6m, etc). which forced the price up 20c.
I think $4.00 was the floor (support level of 26 Oct 17) and we will see this recover to the $5 level at least fairly soon..
SDA Price at posting:
$4.20 Sentiment: None Disclosure: Not Held
