I'm in!25 Sep 2013 14:24
Bought two tranches here this week as this company looks seriously undervalued IMO. I've done some fairly extensive research and it has led me to the conclusion that this company is easily worth £20 - £25 million before any news of further major integrations or growth in KPI's, because of the market share they have already captured in a rapidly growing market.
The small drop today is just a healthy backtest of Tenkan-Sen and 15SMA which were breached yesterday. Immediate targets here for a breakout are 160p and 180p. Any breach of 180p should see the SP move fairly quickly to c.230p to fill that huge gap caused by the placing. That filling of the gap should be more than enough to establish a bullish trend, at which point 250p will be the only major resistance point on a potential run to 350p+.
You only need to look at the 1 year chart to see how quickly this can shift when a few buyers arrive. However, the SP is not yet officially in an uptrend, and therefore there is risk attached to buying at this time. Ultimately I believe that with higher risk comes higher reward, if you DYOR thoroughly, and you believe in the medium/long-term potential of the company to demand a higher valuation than the current one.
Dibs - I've been reading back through the posts since March, and I must say you have contributed some fantastic research. I haven't yet got to the point where you bought back in though, what price did you get?
Have a look at the valuations of similar companies on AIM, the likes of FBT, @UK, OUT, etc etc. Yes they are maybe a year or so ahead of SNTY in terms of revenue growth, but they are all valued significantly higher (4-5x higher!), and if we can achieve a market cap of £50 mil in the next 18 months to 2 years, I would be very happy indeed! With the current number of shares in issue, that would translate to a SP of c. 790p! With the company well funded, I see that as a genuine possibility. In fact if there is a confirmation of breakout here above 180p, I will look to open a long spread bet because the upside could be many, many points from that level.
Like you, I am very happy to have found this company at this valuation, as I don't think it will stay here for long once the word gets out, and the herd jumps back in. Happy to wait it out patiently until then. ATB
Faz