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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Sdi Group Plc | SDI | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| -0.60 | -1.02% | 58.00 | 16:35:09 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 59.00 | 58.50 | 59.00 | 58.00 | 58.60 |
| Industry Sector |
|---|
| ELECTRONIC & ELECTRICAL EQUIPMENT |
| Top Posts |
|---|
Posted at 31/10/2024 12:45 by the millipede Hydrus, FWIW I think you have the issue the wrong way round. Companies do what they do. It is up to investors to allocate capital accordingly. |
Posted at 10/10/2024 11:56 by red ninja Tipped in Shares Magazine todayThree Small Shares To Buy Now A casual glance at the share price chart might put a quick end to investors’ research into SDI (SDI:AIM), but that’s a mistake, in our view. This is a small cap company which has stuck to its largely successful knitting for years, and we expect its fortunes to significantly improve over time. SDI is a collection of subsidiaries involved in the design and manufacture digital imaging, sensing and control equipment used in life sciences, healthcare, astronomy, manufacturing, precision optics and art conservation applications. It’s a buy and build model which closely resembles that of health, safety and environmental kit maker Halma (HLMA), a constituent of the FTSE 100, buying good value businesses which add consistent cash flow and profits to the overall company. Not only does SDI’s growth stretch back multiple years, it has been high-quality growth. Gross margins typically run at around 60% to 65%, high for a manufacturing business, while returns on investment and operating margins are in the double-digits and above industry averages. The end of the pandemic has tossed many a challenge at SDI as customers de-stocked after a prolonged spell of over-ordering. Higher borrowing costs haven’t helped either, but both issues now seem set to improve. This leaves substantial upside on the table, partly as SDI continues to find attractively priced acquisition targets to supplement organic growth, and from a change in market mood. This is a stock which has previously traded on a 20-plus PE (price to earnings), now just 12. History is on its side, we believe. Over the last 10 years, SDI has grown turnover from £7 million to £65.8 million in the year to 30 April 2024 and adjusted operating profit from around £57,000 to £9.6 million. The share price has increased from around 10p to over 200p at its peak, yet today is available at 50p. Not for long, we suspect. [SF] |
Posted at 08/10/2024 07:48 by rivaldo Late RNS yesterday shows Shareholder Value Beteiligungen Aktiengesellschaft, based in Frankfurt, as a new 3.94% shareholder with 4.12m shares:Assuming I'm not mistaken - they weren't on the prior company list of major shareholders AFAICS. Their web site is here: "The business purpose of Shareholder Value Beteiligungen AG is to invest its own funds primarily in listed companies. The aim is to achieve the highest possible increase in the value of the portfolio through price increases and dividends received. Shareholder Value Beteiligungen AG follows the concept of stock picking, which is based on investments in selected individual companies - and not in entire sectors and markets. The aim is to concentrate on a certain number of stocks. This achieves sufficient risk diversification (portfolio diversification) and at the same time enables effective focus on the selected individual stocks. This strategy enables an intensive analysis of the individual company, the balance sheet quality, the management, the products and the markets. The investment strategy of "value investing" is followed, i.e. investing in stocks with high substance and high returns. Due to its existing know-how, Shareholder Value Beteiligungen AG focuses primarily on investing in small and mid-caps, i.e. small and medium-sized companies with a market capitalization of one billion euros. Due to the limited investment volumes, such stocks are rarely in the focus of banks and other large institutional investors. Accordingly, they tend to be neglected by their analysts. This repeatedly opens up exceptionally favorable investment opportunities in excellently positioned companies that are often world market leaders in their respective niches. The investment horizon for equity investments is generally medium to long-term. However, individual short-term opportunities are also taken into account. The stock selection focuses primarily on German, Swiss and Austrian stocks. This deliberate regional restriction makes it possible to have a sufficiently reliable overview of the markets. With this investment approach, the initiators have achieved sustained success over the past decades, including as managing director of the R 3000 investment club." |
Posted at 23/7/2024 12:50 by rivaldo RNS - prelims are next Tuesday, together with an Investor Meet:SDI have already announced they'll be in line with expectations of £8m PBT, i.e 5.8p EPS, with 7.3p EPS forecast this year and a "good finish" and improved cash generation in the last H2. |
Posted at 20/6/2024 09:04 by rivaldo Cavendish's post-update research hasn't been posted here, so...As a reminder, they've reiterated their 175p target price. They also reiterate their forecasts of historic 5.8p EPS and 7.4p EPS for the current year, i.e a P/E of 8.7 at 64.5p. They summarise: "Year-end update – Trading in-line with a stronger H2 The group’s year-end update provides good reassurance, with a strong H2 performance resulting in revenue and profit both ahead of expectations. After recent challenges, trading is responding to management action. A strong cash performance meant net debt held level, despite £3.3m spent on acquisitions. SDI is in a strong financial position to pursue its buy & build strategy. No significant change to forecasts, with potential upside from any accretive deals. The shares offer excellent value, with significant scope for a rerating as investor confidence is progressively restored." "Valuation. With recent challenges now responding well to management action, the confirmation that trading is in line should provide investors with greater confidence. With stronger cash flow, the company has good financial flexibility to pursue its buy & build strategy. The shares currently trade on FY25E P/E of 8.6x, which looks exceptional value in our view, and offers a significant opportunity to rerate as confidence develops that the group is on track with its turnaround, plus the opportunity for any acquisitive activity to result in EPS upgrades. We maintain our 175p target price, offering substantial upside to current levels, with all its near peer group trading at 20-28x FY2 earnings." |
Posted at 14/3/2024 13:54 by worldwidet A change from rivaldo's boring unimportant copy paste contributions...A CEO without M&A expertise. Executives who don't buy shares because they supposedly have too low a salary to buy shares. Is this what SDI needs?I sticking with it... not investable (my personal opinion). 2 investors met with the new CEO and CFO and spoke at length. Read and form your own opinion here. From the report: "...On Stephen Brown and Strategy: SDI Group's investment thesis changed from being a serial acquirer to a turnaround company. Right now the company is at an inflection point, and I leave the meeting not knowing what the business model of the "new SDI" is going to be. Are they going to go back to their past business model of serial acquirer (inorganic growth), or are they going to pivot to an industrial holding business model (organic growth)? I would like the answer to be the first option. However, the new CEO seems to have the right qualities for the second strategy (he has a background in operations and product development, and would make a great COO), but he does not have the qualities needed to lead a serial-acquirer (Mike was an expert in financial engineering). Everything will depend on the person they bring in to lead the M&A, his capabilities and, above all, how much they let him do and undo. We shall see..." The original is in Spanish you have to translate it. Here is the full length: |
Posted at 29/9/2023 11:47 by worldwidet Good investors recognise when a paradigm shift has taken place and a decade-long cycle of interest rate cuts has come to an end.A good investor recognises when the framework conditions have turned 180 degrees and the management and corporate strategy are overwhelmed by the new situation. We are not talking about a short recession like in 2020 after Covid and central banks that then bring the interest rate close to 0 and flood the markets with money. What happens in the next 1-3 years will have an impact for the next decades. Feel free to say today that I am exaggerating with my pessimism. But look at the bond markets because they tell you what will happen. I would advise investors to sit on a mountain of money and buy a few ounces of gold and see what happens in the next few years. I think it's going to get pretty ugly. Just my humble opinion and I don't make recommendations as a matter of principle. The SDI share price seems to prove me right. I'm out of here again and will take my time to see what happens. |
Posted at 09/8/2023 08:53 by worldwidet Don't forget that talks are currently underway between SDI management and institutional investors. SDI has a funny tradition of talking extensively to institutional investors in the days leading up to the company's presentation to retail investors. Why is that? But today these investors are selling shares... Is that good and reassuring?Mistakes like the Monmouth takeover happen when a single person, in this case the CEO, tries to do everything on his own. Mike wants to fight alone on all fronts and seems to have a big problem sharing responsibility. The talk on page 22 of the current presentation about a strong M&A pipeline is also not very credible. If SDI had this strong M&A pipeline, they would not have gone 11 months without an acquisition. The problem is the lack of liquidity. SDI has accumulated debt with probably too expensive acquisitions in the last 2 years. The interest burden has more than tripled and there is hardly any cash in the account. SDI would need acquisitions in the range of £12-16m to keep the M&A wheel turning. Where is this money going to come from to finance these acquisitions? More loans/debt? So that interest charges continue to double at the extremely high interest rates? The M&A track record has also taken a severe Monmouth crack. Who knows what M&A mistakes the coming recession will bring to the table. It is never good when all the responsibility and risk is concentrated in one person/CEO. Hopefully after Mike Creedon we will see a CEO who is willing to invest his own money in SDI shares. |
Posted at 17/5/2023 09:04 by worldwidet Institutional investors now work heavily on the basis of risk budgeting. Risk budgeting is one of the latest methods of portfolio optimisation and is to be used in conjunction with the widely used capital budgeting method.The problem, however, is that risk budgeting forces institutional investors to close or sharply reduce their positions after a certain loss threshold. Especially in the case of microcaps, which tend to be sold off particularly strongly under low volume in market breadth sell-offs, this is problematic if in this phase the large institutional investors are also forced to bring their shares into the market in which there are already no more buyers. The shares would have been in the best hands with SDI Management, as was the case with JDG, for example. I think it is a mistake for Mike and Ford to sell their shares to large institutional investors. If Mike and the management think SDI will continue to do well and the valuation is attractive then they should have kept the shares and provided continuity. But they put their shares in the hands of institutional investors who are driven by other motives and who have to work with risk budgets. The management should own massive amounts of shares, preferably bought with their own money, so that they are in the same boat as the investors. It is always celebrated here by the bulls when big institutional investors buy but I would much rather see management buying massively. the fake purchases Mike and the CFO make where they buy a few shares for little money is meaningless. At VLX, Rothschild also made one of these fake purchases and then the share fell by another 25-30%. If Mike and management are convinced that SDi is undervalued then we should see buying in the £100k range. Managers earning £150-200k a year should be able to buy more than for 6-7k shares. Don't get me wrong. SDI is not going to go bankrupt. It's a great company. Mike is doing a great job. But given the economic and monetary environment and the structural problems at SDI, I don't think the risks are adequately priced. At prices around 110-130p, the risk premium could be attractive. In the short term, the stock appears to be technically oversold, which could cause some traders to drive the price in the short term, but in the medium term I see strong downside potential in the 100-120p range. Those with long term investments need not worry SDI will grow into valuation in the very long term. But in the coming 12-18 months I could see even better entry points than the current ~150p. My opinion. We will see what happens. |
Posted at 25/1/2023 10:46 by worldwidet @steeplejack I appreciate you as an experienced investor who is not blinded by the 12 year bull market but also focuses on the risks.SDI only came on the list of many new investors after 2020 when SDI was one of the big COVID winners from one-off deals in this area (ATIK). The "new" SDI investors, some of whom jumped on the bandwagon very late after 2020, are now trying to continue the success story and the growth that SDI made in its early phase into the future. But the data shows that SDI can no longer just take over small companies with 4-6x multiples, but must increasingly focus on expensive acquisitions of larger companies to achieve a comparable impact on the balance sheet in M&A growth. The last acquisitions were over 7x multiples and SDI will increasingly have to compete with JDG HLMA DPLM and PE funds for good acquisitions. It should be noted that the last 12 years the economy grew strongly when interest rates dropped to 0 and the economy was well supplied with money. In this environment, SDI has also been able to grow its FCF well organically. Now the economy is in the process of cooling down very strongly and this could go on for several years. SDI has built up a mountain of debt with the last acquisitions and the FCF is not growing strongly enough to finance larger acquisitions. Yes it is nice when because of a few thin lines in a major mainstream paper by an investor who has freshly invested in SDI 300p price targets are proclaimed and the SDI price bounces in the short term by 7-8%. But I think it might be prudent to reduce risk in the face of a recession ahead as the CEO and Chairman have done. SDI investors are very spoiled. Everyone expects SDI to beat forecasts and continue to grow at 30%. I would imagine that there will be disappointments in the next 1-2 years if the risk of a recession materializes. 100-120p could well be realistic if panic breaks out in the stock markets because something systemic in the financial markets has broken under the interest burden. Many are waiting for the next M&A RNS but I see it critically. SDI will continue to build up the debt mountain with another acquisition and in a weakening economy and a phase in which FCF from organic growth is lacking, there will be less and less financial power available to keep M&A growth high. If SDI wants to grow further by 30% which is what the investors expect and what the management expects (~8-9% organic 20% M&A) then many and large acquisitions have to be made and financed. I wonder where this FCF should come from if organic growth increasingly disappears. The interest rate structure and the leading indicator are good signposts of what could still happen. In such a time I see CASH as the best investment to wait at the safe edge and to grab if the big panic starts because the high expectations that are currently priced in by the stock markets do not materialize. I pull back again and wait and see what happens in the next 16 months. |
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