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I hope for most of the contributors to this BB it's not falling knife territory. There will be quite a few out there nursing quite big paper losses at the moment.
Don't understand why institutions are selling?
Sig will be in profit by second half of the year...
Definitely something fishy going on..
Mick what's your thoughts from here?
Up from here?
Or continue downward trend?
Most of the fundamentals don't look good. If the company do get into profit later in the year it will only be a small one. This has to be a long term play. From everything I've seen I'm not comfortable investing in the company anymore. The next trading update will be very important. Until then I'd advise everyone to put a stop loss in place to limit anymore potential damage.
As well as the fundamentals, I also have one or two more observations. I used to work for the company and they are in a very competitive market place. Their competition won't take kindly to them trying to steal back market share. They will cut their margins to stop losing market share. This will make it more difficult for SIG to make a decent profit. It's a very cut throat business and there is no love lost between competitors.
It's also very price sensitive and a lot of the products are commodities. Most customers know what they want and don't need their technical expertise as much as you may think. Quite often the customer knows more about the products than the SIG sales staff do.
I also used to work for the leading supplier of fire protection boards to SIG. They tended to rely on me and my office staff for expertise and specifications. I also used to work for a competitor of SIG and we would do anything to take business off them which invariably meant cutting prices to the bone.
I also used to work for a contractor who bought off SIG and their competition. The deciding factor mainly when deciding who to buy from was price.
They've got a tough job on their hands.
Given the recent collapse in the share price I'd expect it to fall further. I expect share prices generally to fall a fair bit between now and the end of September (I predicted this a while ago). I can't see SIG bucking the general trend. Of course I could be wrong so putting a stop loss in place would minimise damage and mean you'd benefit from any unlikely upturn.
The price is the price, for whatever reason.
But I see there is a scenario being set up on this chat show where "the institutions are moving on", and there has been some change for the worse in the "fundamentals."
There is no confirmation, as yet, of the former.
Nor have the fundamentals, which can only be known on company reporting, changed for the worse. There is no secret. They are as published until the next time. In fact, when they last updated, the company reported improving 'fundamentals', in terms of revenue and profitability, on the back of strong trading and increasing market share, allowing them to bring forward their earlier positive outlook.
Raleigh please desist from posting such accurate and factual posts in the future, much better to speculate to suit your own agenda
Im not sure that it is entirely appropriate to value a company using PE ratio when only just turned to profit. But use whatever you like. Its all very 'objective' but retrospective and hence meaningless. Pretty sure if you were that way inclined that you should be using projected earnings.
You miss my point completely. Not for the first time.
It's not up to me how I view the PE ratio. It's not up to you how the PE ratio should be looked at by investors. Given that it's the number one metric that most investors use when considering whether to invest in a company or not, when it's at 173 they are not going to be inclined to invest.
On what basis do you give Sig a PE ratio of 173? Just interested in that.
It might be your number one metric but it is inherently floored as clearly demonstrated here. Many other examples...tesla boohoo etc. That's why many would say it isnt particularly useful. The only useful metrics to traders are price and volume.
Perhaps Mick will come back on that, his own detailed research, etc. Or maybe refer to some selected website. No matter. Plenty of time. Anyway, my thoughts.
The P/E ratio, in the context of Sig, without earnings to put into the equation, is irrational in my view. That is why many web references to it across loss making companies refer to it as not applicable, or something similar. The extent to which a company is loss making, turns up in its results. Everyone with any sense knows Sig is loss making. That was known at recapitalisation, and ever since. People have been investing or not ever since, 'bad' PE or not.
There are likely to be at least two sets of people posting on here. Those who say they are invested and optimistic, and those who say they are not. Some will go so far as to give advice, qualified to do so on their better understanding of world economic and company events. In the future, if all goes well, Sig will create earnings, and a PE ratio will come better into it's own. It is likely to be high. One side will say it is too high and the company is overvalued, the other side will say no, investors are pricing in future earnings growth.
In Mick's case, he says investors will not invest due to a high PE ratio which he got from somewhere, I suppose. He second guesses them. Historically badly, as his guess has not been the actual experience. It will, as before, be the level at which individuals see prospective value which will dictate that.
If I have him right, he sees Sig as a potential multi-bagger but not at this time. Contemporaneously he questions the company's survival, and says the company is at risk of 'bankruptcy' ( bad choice of words, that's for individuals, companies go into liquidation) I suggest that may have been the case historically, though there were other options apart from the recapitalisation, but there is really no need to be floating that again now, not if you see truth in the last update - "We do however continue to expect the second half to be both profitable and cash generative, and in light of the stronger than anticipated recent performance we now expect full year revenues to be slightly ahead of prior expectations, and profits also to be higher than previously expected."
Invested posters may also choose to find some confirmation bias from forward thinking in the creation of distributable reserves. The uninvested posters will look elsewhere to make their case, for whatever reason they feel the need to make one.
GCN, you need to read my comments more closely. I never said it is my number one metric. I said it is the number one metric for most investors.
I totally disagree that only volume and price matter. Simplistic in the extreme and very wide of the mark.
GCN, you need to read my comments more closely. I never said it is my number one metric. I said it is the number one metric for most investors. Please pay closer attention.
Most investors lose money I believe you said. Perhaps they should rethink their number one metric.
Raleigh asked a quite reasonable questio which you seem to have missed. How did you get to 173? And what makes you think it is relevant here?
Clearly you are new to investing in stock but dont worry you will learn the ropes eventually.
Mick what region of SIG did you work in
Raleigh, you say the price is the price for whatever reason. Could you try and be a bit more vague in future? Your statement is nonsense.
You say there is no confirmation yet of a change for the worse in the fundamentals which can only be known when we get an update from the company. Again you are talking nonsense. There are many things that can affect the fundamentals. We don't have to wait for company updates. Your claim is too daft for words. For example the P/E ratio has worsened and we haven't had to wait for a company update for this to happen. The share price has collapsed recently. Clearly something fundamental is going on.
I could go on.
Who was the branch director / manager during your time there
It depends on your understanding of fundamentals. If investors wish to rely on them, and you quote them as 'not looking good', there must be some objectivity involved. But you apparently wish others to vary them according to your view of matters other than published. Ie. Your version of fundamentals. That would scarcely be fundamental. You go on about a PE ratio. I have dealt with that. And although I believe the PE ratio itself is inapplicable when there are no earnings to put into it, please give the evidence that your PE ratio has worsened since you were invested, by mistake as you would have us believe, but even before that at a much higher price. You will need to know Sigs earnings as of today, or lack thereof, to set against the price - price to earnings ratio. The price of the shares has decreased of late, so on any calculation the price earnings ratio should have improved, unless Sigs negative earnings have increased. You must know they have and be able to prove that - I await your figures in support of your contention of a PE ration of 173. It will save me waiting until the fundamentals are published.
Melseth, why do you ask?
Raleigh, I've previously explained how the P/E ratio was worked out. You and GCN really do seem to have a problem with retaining the information I post.
I've also recently given information on some of the fundamentals and why they are not looking good. Please try and pay closer attention to my posts in future.
I raised a couple of issues with you, on which you chose to make the running.
I asked for some proof of your assertion of a current PE of 173. You have not provided, now or earlier.
You have given no information on fundamentals because nobody can until they are published, and without them you cannot calculate a current PE of any kind.
Instead you fudge and prevaricate. Not much else you can do I suppose.
Melseth, it's been 21 years since I worked there. My memory is not that good but I think he was called Paul Lindley. He was a very slim man with ginger hair.
Given your background I'd be very interested to know what your take is on SIG.