Thursday, April 21, 2011

Meeting # 35 SDI Valuation

This meeting is due to occur in the future in May 2011 (see calendar above for exact date).

SDI is a company that operates in the research and development, manufacturing and marketing of dental restorative materials. SDI’s products include alloys, etchants, glass ionomers, sealants, cement, equipment, tooth whitening, composites. It operates in Australia, Europe, the United States and Brazil. The Company’s subsidiaries include SDI (North America), Inc, SDI Holdings Pty Ltd, Southern Dental Industries GmbH, SDI Brasil Industria e Comercio Ltda and SDI Dental Limited.

The share price has taken a hammering recently with the high price of silver and high Aussie dollar. At this time of wring the share price is 17 cents.

Discussion points prior to the meeting
In the last valuation we found some descepencies with what comsec claimed the debt levels were against what was in the annual report. For this valuation I did some cross verification and was supprised to see the cash in the annual report to be 875,000 but in comsec it was 3,406,000.

ThenI realized that the 3406 is for the consolidated entity not the company (we'll need to discuss this)

The Meeting
Attendees Paul, Mark, Justin, Tom and analysis was sent from Roy in the UK

As a value investment it was not good and the inconsistent earnings have made it a difficult company to value. Return on capital is also not good.

Click Here for our Valuations

Meeting # 34 ARB

This meeting was to present our findings on ARB 
Thanks to Mark Justin for attending and Roy for sending in analysis (despite not being able to attend as he was in the UK.

Our analysis varied in values from $3.30 to $17 most of the reason for the difference was around the margin of safety we employed. Both Justin and Paul missed the high level of debt (%35 of total assets) from looking at the figures from commsec. Mark has calculated a more accurate earnings figure by basing his figures on a free cash flow. Mark and Paul got earnings growth at around 35%. Justin was around 8%.

Spreadsheet of our analysis can be found here

Tasks for next meeting
We will all analyse another very interesting company called SDI which is a dental company that has been hammered recently on the share price. Go Forth and Value!

For everyone could we please base our valuations on beating a 12% bank return. Roy asked me to do this so the valuations can be more easily compared