Perspective People

The level of emotional subjective nonsense that people come up with when something rather run of the mill happens never ceases to amaze me. I have seen it all before

ASIC will not be investigating SGH's latest disclosure. (SMH Absolute gutter reporting) The irony is that had they waited until February and announced something they new about in December - then ASIC would be given cause to get involved.

SGH's current share price is currently at a PE of less than 3 on todays close.

PERSPECTIVE
A new CFO has taken the reigns - he undoubtedly is the individual who forced managements hand with this announcement today. That being the case, do you believe he would allow them to make bullish statements about December and Positive Contributions through the second half if he wasn't convinced.

Back to my point about a pathetic PE:- Writing down some assets and taking a conservative approach to forecasting from this point on is already priced in. WHO CARES BRING IT ON.

Once you remove all the excuses - questionable asset valuations, WIP calculations etc etc - you remove all the reasons people trashed you for in the first place.

SGH is currently priced for a massive loss in 2016. (Book loss due to write downs) Yet its still likely to generate a big whack of cash. If it can generate a bucket load of cash, meet or exceed its debt obligations and reign in expenditure, then in twelve months time people will be asking themselves what all the fuss was about.

I don't particularly care which way the price moves from here. I will trade it as it comes and goes.

February is the litmus test and I believe the point at which SGH starts its recovery.

Good luck