Hi Persistentone, most companies have some debt, I thought SSM's...

Hi Persistentone, most companies have some debt, I thought SSM's was reasonable after there cap raising, so I thought using P/E was a helpful indicator to point to a reasonable indication that there is a potential upside in the stock price.

I'm not sure why you selected the "adjust for current price being about .68 of equity. So you have around a 9% simple return, assuming no reinvestment of retained earnings."....
Would you mind explaining it in more detail please....

It is difficult to control, efficiently a large number of sub contractors. The nature of the beast is that you want them to work for the lowest price at which a good service is provided whilst they want to be paid the most. For SSM to win large service contracts like the one with Telstra, they have to quote a competitive price, which by nature leaves a small profit margin, once they have paid their subbies....It's all about turnover and keeping control of you overheads......A lot of people were betting on the NBN to give a quick hit to the share price. That may still happen if/when it gets off the ground. At the moment there are too many storm clouds on the governments radar ie carbon tax; poker machines etc. They are in power because of the few independents. Their focus would be on keeping them happy.

With the NBN rollout the cost is dependant on the acceptance of the risk level associated with the rollout by the companies. The NBN company from what I understand wanted the companies to shoulder all the risk ie cost blow outs, delays etc. This of course would jack up the price quoted. At the moment, the discussions are that the NBN company share some of the risk, which will reduce the price......

Another point is that SSM still have not re-introduced a dividend payment, even a small one, would have a great boost in the confidence and share price....

Also, don?t forget SSM have fingers in a few pies, especially green technology which is a growth area?..