SDI: Remember to Brush Your Teeth

[k1w1]

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.

[robbo]

"Touche" .... KIWI 1 !!

Hope you, your family and loved ones ;

Have a merry merry Chrismas,

Seasons Greetings,

Regards,

Robbo

[winner69]

Amazing ... shareprice nearly half what it is a month or so ago

Punters don't forget companys that wait until Xmas eve before the bad news.

K1w1 comments about capitalised research expenss (echos of ION here) needs consideration ... one would have to assume that even the 7.9 cents / share forecast for 2005 wouldn't have too much of these deferred expenses bought back into the P&L.

Question mark over how much real earnings are ... so look at cash flows .... and last years operating cash flow was only $4M (3.4 cents/share)

Be interesting to see how the share price behaves from hereon in but Phaedrus would have fun with the chart of this one.

[k1w1]

quote:Originally posted by davidrob

"Touche" .... KIWI 1 !!

Hope you, your family and loved ones ;

Have a merry merry Chrismas,

Seasons Greetings,

Regards,

Robbo

No Robbo, its actually 2- 0, as I caught you out on that Bab****& Brown episode.

I am also anticipating that I will eventually get bonus points for cottoning on to you earlier than most, as will Cap.

Thank you for your best wishes . Have a Merry Christmas and a good hard look at yourself in the mirror in the New Year.

K1w1

[Krustytheclown]

Well done Kiwi on alerting all to the absolute bulldust that was called "strong growth at SDI" and "reliable growth and percieved low risk" and other illconcieved ramping while the titanic took on its first bilge filling washes.

I feel for those silly enough to be taken in by some of the expoused babble about SDI in October!

Gregor.

[OneUp]

Market has certainly fallen out of love with SDI, down another 10% to $0.72 (pre split $3.60). But is this the worst of it? The company remains confident of a return to growth, forecasting about $9m NPAT in 2006. Anyone believe that?

On forecast NPAT of $4-5m, it's on a PE of 17-23. Looks a little pricey IMO.

[Flying Goat]

This one has an RSI below 10 - and looking oversold on about 9 or 10 times FY07 forecast earnings.

[steve fleming]

Thought i'd bump this Robbo classic thread after an impressive profit upgrade through the week.

"SDI estimates that it will achieve a net profit after tax for the 12 months ending 30 June 2013 of $4.0m to $5.0m, compared to $1.97m for the
corresponding period last year. "

So profit back to pre GFC levels, but share price is still way down, given lower multiple environment.

One of my biggest regrets last year was not picking these up at 10c.

[Stranger_Danger]

I was lucky to pick up quite a few of these in the low 10's. Second go round for me - this was a ten bagger many years ago.

To be honest, its moved much faster than I thought which is why I didn't put it in the comp (damn). Keep in mind, this improvement has come without a fall in the AUD which would help it further.

Definitely a bit more in this one.

[steve fleming]

I was lucky to pick up quite a few of these in the low 10's. Second go round for me - this was a ten bagger many years ago.

To be honest, its moved much faster than I thought which is why I didn't put it in the comp (damn). Keep in mind, this improvement has come without a fall in the AUD which would help it further.

Definitely a bit more in this one.

Reaching a 5 year high, presumably benefiting from a lower AUD, but also, a relatively low price of silver.

Will be interesting to see the impact of any sustained lower AUD and silver price on the FY14 profit - will likely be very material.