Good business but nbn is almost finished. Yes there will be maintenance work but this is expected to be much smaller ans less profitable than ‘activations’. Management noted this ‘cliff’ in revenue and hence purchased Comdain.
Based on people I’ve spoken to, this is a primary concern. Also, management may try to ‘fill’ the revenue cliff by acquisitions and when you’re trying to plug in a revenue gap with an acqusition things seldom turn out good.
at the face of it, SSM is a fantastic business. Decent PE, good management, no debt, fantastic ROE. However, by taking a cursory view you’re missing the inherent risk in this business which is actually that management makes a stupid acquisition to plug the cliff in nbn activations or don’t find replacement revenue.
SSM Price at posting:
$1.91 Sentiment: None Disclosure: Not Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)