SGP hit an interday high of $3.54 on 8 December 2011 then drifted down. SGP looked like it was going to break out upward again through $3.20 arround 22 March but the media release on 27 March 2012 in respect of the deteriation in their revenue forecast saw an immediate sell down.
Despite the assurance that the impact on the bottom line was minimal and there would be no reduction in the forthcomming dividend, the share price fell to a low of $2.91.
It is worth noting that at $2.91 sgp is trading at a discount of 21% to the nta of $3.69, further the yearly dividend confirmed at $0.24 represents a yield of 8.25%. The revised earnings forecast of $0.305 per share means the price earnings multiple is only 9.54 times compared with a market norm of arround 12. All-in-all the share appears to be undervalued even at the Friday close of $2.99.
The forthcomming dividend (End of May payable in August) plus the potential upside of capital gain on a rebound to the $3.10 - $3.21+ area had enough appeal for me to enter. Then again I may be wrong, sgp has tested the $2.70 range before. Also I may be biased as I chose sgp for this months stock tipping competition. As always dyor .