This share has fallen in value 34% since mid- November. Latest update on SDI shows why caution was needed :

Falling stock a shock for SDI investors
By Christopher Webb
December 24, 2004

Shareholders in Jeffery Cheetham's SDI have received an unexpected and unwanted little Christmas surprise.

On Thursday the fast-expanding dental products outfit released an earnings downgrade and the shares promptly fell up to 11 per cent, to $1.25. They closed at $1.30, on relatively heavy volume.

This is a stock that has been declining fast recently, and the asleep-on-the-job stock exchange failed to ask the company if it could shed any light on the weakness. From mid-November to the close of business on Wednesday, SDI shares had fallen by 34 per cent.

Thursday's tidings were that SDI's earnings for the current half-year would be "minimal" due to a slower start in sales and other factors.

Mr Cheetham declared he was confident that the second half would meet its earnings target but the annual target would fall short.

The year's earnings-per-share forecast was reduced from 8.5¢ to 7.9¢ - still a 15 per cent increase.

This is a company that promised - and achieved - much on earnings, so a lopping of growth from 24 per cent to 15 per cent was not appreciated.

Meanwhile, interests associated with one SDI director got lucky on November 15.

Gabrielle McCorkell filed a notice with the exchange on December 3, revealing that 125,000 shares had been sold at $1.86 apiece on November 15, raising $232,500.

Christmas did indeed come early: those shares on Thursday were worth $156,250.

But the McCorkell interests are suffering, along with others on the register, on the 550,000 shares that were retained.

quote:Originally posted by davidrob

SDI--Time to remember to Brush your Teeth

On 11/10/04--

I was verbally smashed "personally" for suggesting we keep an eye on SDI Dental Products:[}][8][}]

It quite hard sometimes to: "Go against The Crowd"

Anyway;... since it is nearly 1 month exactly a quick UP-Date, on SDI:

For those who bought on the date of the first Post on SDI they would have Paid: # $1.62.... Since then, and still trending UP--in 4 weeks time a nice healthy safe Rise of 21-22% on your original Investment; closing at just shy of $2.00---or put, another way; on $50,000--you would have made: $11,000 Profit.

Kind Regards,
Robbo




quote:Originally posted by k1w1

SDI should be viewed with caution. There have been increases in inventory which may or may not be significant. What is significant is SDI's treatment of research and development. Instead of expensing it it capitilises part of it. This is different from co's like Tech One and IBA who expense it 100%.

In this case SDI capitilised sufficient of its research to enable management to reach its profit target for bonuses to apply. I regard such actions as insights into the company.

Splitting the shares is another example of managing the share price rather than the company. It adds nothing of substance to the company. Wheras more concentration on shifting the inventory might allow the profit target to be hit without massaging the research expense figures and give a more honest profit figure.

Don't know what Aunty Madge and the boys at the pub reckon about that
sort of behaviour, Davidrob.