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Thread: SCT Chart

  1. #61
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    one to watch if US dollar rises

  2. #62
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  3. #63
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    After giving a trendline break "Buy" signal a couple of months ago, SCT has been in a steady uptrend and is looking good - right? Wrong! Take a look at the craftily inserted short-term plot of the On Balance Volume indicator. For about a month now, while the price has been rising, the OBV has been falling. (Volume has been higher on down days than up days). Distribution has been taking place as bigger holders exit this stock. Obviously this is Bearish. The red extention to the price plot shows todays current price drop of 2.2% to $2.65.



    You can see that TA has been working superbly with SCT, in spite of this stock being quite lightly traded. I sold at the trendline break last year. I'll bet that quite a few fundamentalists now wish they had done the same!

  4. #64
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    Any sign of a turning point?! In a word, NO. You don't need me to tell you that though - SCT has just made a new 3 year low.

    The chart shows trendlines for the long-term downtrend (magenta), the medium-term downtrend (red) and the On Balance Volume indicator. It would take a break of at least one of these trendlines before you could begin to get even a little optimistic.


  5. #65
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    Oh alright, I'll own up as well.[:I]

  6. #66
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    quote:Originally posted by belgarion

    The g'damn exchange rate!

    What value would you put on SCT with the NZD/USD at 0.60?
    Good questions Belg. Chairman Marsh obviously thinks it is higher than the closing price on Friday, as he has been buying up shares, via Silveracres (the largest shareholder), in the low two dollar bracket over the last month.

    Interestingly Marsh performed exactly the same trick during the last profit slump and associated share price dip in 2001 and Silveracres hasn't sold down any of those shares since! That rather shoots down Phaedrus's theory on the big boys and the smart money getting out of SCT!

    This latest profit slump, I will admit, has been extremely disappointing to me. Following on from the 2001 profit slump, which we were lead to believe was a 'one off', due to factors outside Scott's control, doubley so! High exchange rate or not, you would have to be a very staunch supporter indeed to believe that Scott Technology had not lost some of it's reputation, at least in an operational sense. So how to value the company from here?

    If we see periodic profitability squeezes as repeating occurences, then perhaps it makes sense to evaluate SCT over the whole business cycle rather than try to value it on a snapshot basis? That is a slightly different approach Belg, to your question on valuing the company 'now' when it isn't making any money.

    Adjusting for bonus issues, the dividend payout on this share on a per share basis since listing has been:

    1999: 8.7c
    2000: 8.7c
    2001: 4.3c
    2002: 8.7c
    2003: 12.4c
    2004: 13.0c
    2005: 4.0c

    That gives a mean dividend return of 8.5cps over the business cycle. Put that over Friday's closing share price of $1.91, and you are getting a gross dividend yield of some 6.5%. I'd say that is fair value. But if you believe that profitability can be returned to 2003/2004 levels soon then you are looking at a gross yield approaching 10%. I'd class that as astonishing value!

    Some weeks ago, after the 2005 profit downgrade was first announced, I placed an order for SCT with my broker. I think it was the closest I have ever come to being sworn at by a businessman in a suit! The conversation went something like this:

    S: Hi B, I hear there has been a profit downgrade at Scott Technology today. What are they trading at?

    B: $2.20 buyer/$2.25 seller.

    S: I wanted to put a cheap buy order in. Do you accept orders rather below the market?

    B: You want to put in a buy order at $2.05 or something?

    S: Actually I was thinking of something a little lower around (mumble mumble)

    B: YOU WANT WHAAAT!

    At that stage the conversation became a little animated but the broker agreed to accept my order in the end.

    I hadn't thought much about that order over the last few weeks. I thought that if anyone accepted my price I would be astonishingly lucky. Yet on Friday my ship came in.....

    I don't see Scott's returning to the all time highs of $3.80 or anything. But for the long term investor I think $1.91 is a very attractive entry price. I always feel good about buying shares at a price less than the insiders are buying in at. Yet I don't see much share price movement over the next six months, so this isn't one for the share traders.

    But from a long term investors viewpoint, I do know (because Scott's is such a lightly traded share) *if* I wait for any uptrend in the share price it will be far too late to buy! In a market unusually devoid of bargains I'm rating SCT as a buy 'right now', and I've backed my BUY rating with my own money!

    SNOOPY

    discl: hold SCT, added some more last Friday.


    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  7. #67
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    SNOOPY, SCT is a very easy share to predict. Nov, dec is where all the large movements in sp eventuated. We have had plenty of lets say hints that instead of a rise in sp this time a fall was looming. the smart investor should have been out of this twelve months ago at over $3 if they had any sell system going at all. I will venture the prediction that your averaging down to buy more at $1-91 is still to high. The fundamentals read this way. The NZ dollar will take time to retrace, the busines that SCT are in is highly competative.the market in general is destined to track down, they will get more than their share of negativity. The golden macdunk rule is never buy anything on a downtrend regardless of how right it feels. macdunk

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    "That rather shoots down Phaedrus's theory on the big boys and the smart money getting out of SCT!"
    Snoopy, it is very naughty of you to say such a thing - re-read this thread and you will find that I have NEVER MENTIONED the "big boys" or "smart money" as getting out of SCT. The current downtrend in the OBV (as plotted at the top of the latest chart) does show that the general public is getting out, though.
    Wasn't that a good Sell signal way back in 2004? And some of you guys hope to convert me to a more FA orientated approach! Given the relative TA/FA performance of investing in this stock, I would have thought that people like you and K1w1 would be trying to incorporate a bit more TA into your systems!

    K1w1, I think your experience with this stock has been good for your spiritual growth. You were quite antagonistic toward the charts that I was posting in the first page or two of this thread, but over this year, as your investment in SCT has halved in value, you have become a much nicer person - gentler, kinder, more open minded and less sarcastic. Well done.
    Here's to ego-free trading!

  9. #69
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    Phaedrus, if it goes much lower I may turn into Ghandi.

  10. #70
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    KIWI my old flower dont throw a wobbly stick with it man average down. Sorry mate i owe you one. pals for life, macdunk
    quote:Originally posted by k1w1

    Under $3.40 so lets see you techies take your medicine like men !

    I don't want any MacDunk wobblers who act contrary to their hybrid code, always with some weasel worded ex post facto rationalisation.

    Phaedrus here are my views on the fundamentals.

    Scott's real asset is its location and workforce. Because of where it is and because South Islanders are real men who do real jobs they have a highly skilled workforce who arent going to leave. Peter Jackson sourced many of his Weta technicians from small towns in the bottom of the South Island where making do with whats available, creating and fixing are just a way of life. Like farmers used to do, and mechanics before they became replacement part fitters. So just like Weta these Scott boys are world class. Like all of us Mainland born lads.

    I read there was almost a cult amongst managers who had installed their plant. Setting up assembly lines in the third world seems to be the sort of niche that we should be in to me. They always have no debt. Currently the currency will hurt them. In Buffet terms they have lumpy earnings which the market doesnt like. So thats my fundy take on them.

    Enough of that. Its entertainment time. I want to go watch the SCT shareprice as the techies hold hands as they jump from the Twin Towers

    GO YOU LEMMINGS !!!!

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