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Bill Graham's avatar

Excellent analysis of SDG. Thank you. They need a change of management in my view. The IP income is also less than secure, I reckon. Fashions and tastes change, and even William Morris is not immune from that.

Regarding ECEL, they supply more to trade than DIY, so a more valid comparison might be with the likes of HWDN or LORD. That makes them seem priced about right to me, and their future fortunes may well depend on the government's ability to deliver on its house building programme. Sector looks to be on the up in anticipation of this.

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Simon Rowan's avatar

I like Sdg just because of the quality of product and design being in that field myself many years back. Not immune from dowturns though. KGF had a bit of a rally before its recent retreat. A very mixed picture which is hardly surprising given the uncertainty and general insanity out here at the moment. Have nearly picked up Sdg several times this year but fortunately resisted so far. Quite a few stocks I can say the same about. I just hope that the big American corporations will come out and back those small companies that took Trump to Supreme court. He really does not have a clue how much damage he is doing. Just seems fixated on how they have been ripped off, which is hysterical and a Nobel peace prize of which he would be the last candidate to get.

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Boon Koh's avatar

It seems like the popular trade at the moment is the TACO trade - Trump Always Chickens Out. Buy the dips when he makes some shocking announcements, because he won't / can't follow through....

I do think there is something not quite right with the US economy, despite shares fully recovering and actually powering higher. Dollar is weak, so are risk-free treasuries.

Anyways, on SDG... I note that they haven't announced any big licensing contracts in H1. No surprise; who would want to provide guaranteed accelerated income from the next few years, with the uncertainty. That could set up for a bad HY results to Jul25.

On all usual valuation metrics it is cheap. BUT if it goes into loss-making because of lack of Accelerated Licensing and the continued losses in Brand and Manufacturing... then valuation metrics go out the window, and it can get to really silly low levels.

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JAS's avatar

Interesting comment on that Octopus was off-loading SDG shares. How did you source that titbit?

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Boon Koh's avatar

I keep track of the Holdings RNS in my notes.

It looks like:

May23: Decrease from 13.3% to 12.95%. After FY results

Oct23: Decrease from 12.95% to 11.86%. After HY results

May24: Decrease from 11.86% to 11%. After FY results

Mar25: Decrease from 11% to 10%.

So it looks like they've been keen to sell down for last 3 years, usually after results (guessing for liquidity? and nothing to change their mind?)

But the latest decrease was not after results.....

I'm inferring that they're still looking to sell down their stake, but not in a big hurry to do so?

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Simon Rowan's avatar

Good bounce today on SDG, but appears some sellers are hungry to bag their small gains. It’s definitely cheap. Good job I don’t have any spare cash. Think 35p entry might be pushing it . Must be a target for TO. Not much on the market that isn’t lol!

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