I have been looking at quality serial acquirers and I have noticed a lot of them have dips in profit and/or revenue in 2024. So I think the inventory destocking argument is probably credible.
You reference my article in the picture in your article. You say all the articles were when SDI was in a bull run. But you miss the fact that Mike Creedon was the secret sauce behind the company's success. M&A is a skill. He had it. He has gone and the new CEO isn't in the same league. Creedon was a finance guy, the new CEO comes from an operations background. It isn't the same company that it was.
I missed to reply. I explained in the article that what you are and what people are doing is underestimating the new CEO intelligence greatly. A bachelor degree student can understand the maths of M&A easily and learn to do a few phone calls. A due diligence analyst can be recruited. It's not quantum physics.
It seems with these technical companies knowing the operations, competitive position, quality of technical personal, culture and general technical knowledge is far more important than knowing how to build a few DCFs in excel?
I've made SDI top 2 position with a 74 gbx average cost for now (im still buying). Surprisingly, it's dirt cheap with two catalysts (lower rates mean lower interest payments on their debt, plus they have already said they are negotiating an acquisition at historic multiples of 4-6x EBIT). Don't know how this doesnt work out lol
if sales tank due to an economic crisis, it does not work out, but it's widely diversified, which should offer some stability or a rebound after one year max
Being a science product company, it is supposedly more resistant to economic downturns, although they sell a lot of equipment, which it's replacement could be delayed, and they do not only sell to governments, so they would surely be impacted. What would be worse is if governments cut R&D budgets. Anyways, I agree with you, but it would have to be a severe crisis, at that point, all equities would be in problems.
I have been looking at quality serial acquirers and I have noticed a lot of them have dips in profit and/or revenue in 2024. So I think the inventory destocking argument is probably credible.
the micro economic environment is very tough.
You reference my article in the picture in your article. You say all the articles were when SDI was in a bull run. But you miss the fact that Mike Creedon was the secret sauce behind the company's success. M&A is a skill. He had it. He has gone and the new CEO isn't in the same league. Creedon was a finance guy, the new CEO comes from an operations background. It isn't the same company that it was.
I missed to reply. I explained in the article that what you are and what people are doing is underestimating the new CEO intelligence greatly. A bachelor degree student can understand the maths of M&A easily and learn to do a few phone calls. A due diligence analyst can be recruited. It's not quantum physics.
It seems with these technical companies knowing the operations, competitive position, quality of technical personal, culture and general technical knowledge is far more important than knowing how to build a few DCFs in excel?
I've made SDI top 2 position with a 74 gbx average cost for now (im still buying). Surprisingly, it's dirt cheap with two catalysts (lower rates mean lower interest payments on their debt, plus they have already said they are negotiating an acquisition at historic multiples of 4-6x EBIT). Don't know how this doesnt work out lol
if sales tank due to an economic crisis, it does not work out, but it's widely diversified, which should offer some stability or a rebound after one year max
Being a science product company, it is supposedly more resistant to economic downturns, although they sell a lot of equipment, which it's replacement could be delayed, and they do not only sell to governments, so they would surely be impacted. What would be worse is if governments cut R&D budgets. Anyways, I agree with you, but it would have to be a severe crisis, at that point, all equities would be in problems.