Replies to post #89201 on Savvy Trades and Investments

[hweb2]

There's the SGMA 10K. Good news...looks like the inventory adjustment only boosted Q4 earnings by .05/share. I was worried it might be more.

From the 10K-

1.)The Company records inventory reserves for valuation and shrinkage throughout the year based on historical data. In the fourth quarter of fiscal year 2021 physical inventory results were completed resulting in an increase in income before income taxes of approximately $276,000 net of a provision for inventory reserves of approximately $1,173,000.

The aggregate after-tax effect for the above adjustments in the fourth quarter of fiscal year 2021 was an increase to basic earnings per share of $0.05.

[wadegarret]

Hweb, SGMA

Supply chain issues mean nothing, when demand is high. Just look at the semi conductor stocks, where the SOX index is up 160% in 16 months despite supply chain issues the entire time. Actually the supply chain issues probably keep the rally going longer. Ok, so the WAGZ aquisition dilutes by about 33%. So I figure the $.36 April qtr is $.24, but that gives zero accretiveness to the acquisition. Even then, the CEO said backlog at record levels, demand to remain high, and to expect similar results going forward. Therefore, even with the dilution from WAGZ & an assumption of zero accretivenss(which is ridiculous), I see around $1 in EPS potential. Stock should be worth $10+ IMO. I bought in the mid $6s, and plan to hold till $10.