for more information about stanelco click on the links.

driver's research page link
http://www.moneyam.com/InvestorsRoom/posts.php?tid=7681#lastread
website link
http://www.stanelco.co.uk/index.htm

I stand corrected - so its not a problem then until the share prices hits 11p.

Ok then - so hypothetically - when the sp hits 11p tomorrow - the same question. What is the likely impact - if any ?

baza

i don't know , baza. i haven't been in that situation before. you are correct in saying that hitting 100m m/c did give seo a leg up on the way up so it would follow that the reverse is true. let's hope we don't get there.

Think you may be right on that Baza.
Lets face it, it happens all the time when companies move between FTSE 100 and 250 etc. etc. as all the "tracker" or passively managed funds have to either buy or sell in order to stick to their prospectus.
Alan

baza: I doubt whether the 100M pound mark is a key issue. I mentioned two or three days ago that I felt the cap justified on fundamentals was around 100M (revised to 150M in the event that the Starpol expected announcements indicated a value on 50M for that product). I think its worth having a clear idea of a reasonable expectation of what current cap. should be without hype and without factoring in future announcements that are not guaranteed. I will spell this viewpoint out which is pretty consistent with the viewpoint of proptrade given earlier today.

My view is that the 200 machines from ASDA can be taken as read. The reason is that we would have to be told if the forecast is to be marked down as it is in the public domain. Note that SEO will not, in my view, and should not, release details on every order or even group of orders; a trading statment is in order if there is good reason for it, e.g. period end or a significant new contract. KBC Peel Hunt advised that each 100 machines retrofitted by SEO were worth 2.5p on the sp. Thus 10p is justified for SEO on the basis of a projection of 400 machines, i.e. 200 from ASDA and 200 from others; the period need not be the year ending 2006 but rather the orders delivered in hand. 10p is approximately a cap. of 92m. We should know more in the next week or two what Starpol is worth in revenue terms.

The other factor that seems to have been largely ignored by the market is that KBC Peel Hunt have upped their forecast earnings for 2006 to 7.3M which represents a pe of 14 at a cap of 100M. They are company brokers and work on the most up-to-date info available. I expect that there are quite significant earnings in that figure for Starpol and quite likely for frogpack et al. So we are hankering after RNSs when the info has been provided from a reputable source. If it it had been Evolution, there would be much more room for doubt. The key conclusion is that we are now pretty well at the stage when futures are no longer priced in to the sp.

Having said that, could the price move lower? Today has been alarming as the fall has gathered pace on significant volumes. What I called as a support level around the last placing price of 13.75M has been breached big time on significant volumes. TFC calls a signifant institutional seller as the reason but I suspect that today has had a lot of stop losses breached and I see evidence of significant shorting activity.

It is helpful, I suspect, to look at the lessons from last year's darling, ASOS. Price moved from single figures up to 75p plus and touched 90p. Then they reported that profit margins had dropped in the Xmas season due to warehopusing problems caused by unprecendented volumes. The sp faded to 42p (lucky to call the bottom) and has only now recovered to 70p. (Incidentally, worth going long ahead of the quarterly statement next Monday!) The bb is lucky to get one or two posts per week compared with 100+ per day for SEO. A new warehouse has put those problems in the past and none of the fundamentals for ASC have changed.

The interest in SEO remains yet the bearish momentum is gathering pace. It would take a lot to reverse that trend. There will be a lot of traders who will be making a lot of money, like TFC, in shorting the stock. So it could go to 10p or below. But I would see this as overshooting and therefore a real buying opportunity - not necessarily going long until it is clear that momentum is changing.

Finally,it is worth repeating that the fundamentals have been strengthening during the year with one significant exception. As I have said a day or two ago, the company raised expectations too high in terms of the time it would take for the ASDA agreement to get off the ground. I would prefer them to say that they did get it wrong - but those of us in business must have been in that position, probably several times; having been in IT I am fully aware of the problems in forecasting; come on chaps, we are dealing with high tech. innovation, ground-breaking stuff. I suspect also that Stanelco, the company, have been overly concerned with putting out news, rather than waiting for concrete announcements. Thats great whilst news is flowing but, and you can see the insatiable desire on this bb, it eventually leads to problems when there is no hard 'news' to announce.

Conclusion? The short term is difficult to call. But we are returning to real buying opportunities for what will probably be a less steep rise but probably that much longer and consistent. Wishful thinking? Rather based on analysis of the fundamentals - happy to justify. Risk? Always was risky and will remain so for the next year or so - would we want it otherwise? that's where the filthy lucre is!

Eric

Thanks Eric - perhaps my top up at 12p was a bit premature - but its done now - will have to wait and see what the next few weeks bring us.

Regards Baza

baz. My prediction is that you won't regret ineed it may well be at least a LOL situation! Awfully difficult to call the bottom - did it both this year and last with ASC but can't think of another instance. I'm far too much of an optimist to call the top!

Eric

I agree with bos, my position at the moment is out except for a token holding, every one has there own agenda its OK some punters saying that they are going long what ever happens, if you have a small holding thats easy to say but to lose 1k to 2k a day is a bit hard to swallow. The problem was the M/Cap the orders so far still do not live up to it so consequently we are waiting every day for the next RNS when it doesnt come investors start to dump and then we are off again on that bloody downward slope. I am now in the same position as andy waiting to get back in when I see concrete orders.

There is no doubt from the conversation i had this morning with the FD that a number of asda GS machines have been installed and are running but not ten, as he said we want to announce in tens at least. The other thing i noticed was that they were not bothered about the SP fall and showed a bit of arrogance as if to say wait till the rns's and they will all be back in. The 3rd point is that it seems that SEO will try to seek a joint statement with ASDA to say that the 200 machines are a certainty, and with it some real numbers on Biotec, which up until noiw seo have not provided. If asda are happy to do this then i understand seo's attitude to the SP

Don't you knw the fd's name?

Strange he would announce price sensitive news such as conversions to a total stranger.

Hardman report september 04

Where did the hardman analyst get their figures from? It states minimum requirement in year one, 100 conversions.

Either they were told porkies(which is worrying) or reiser changed their mind(which is also worring), it's time they started explaining what happened to these forgotten rns releases; lets hope they're aware releasing false news is illegal and can lead to a prison sentence. Hardman were paid to write this up by Stanelco if anyone didn't know.

"The Reiser agreement envisages 100 machines being converted from thermal sealing to RF over the next year. However we believe it is likely that more machines will in fact be converted, with 100 merely the minimum firmcommitment."

EWR

Why should I believe all is well with the 200 Asda machines when as far as we know Reiser didn't convert a single machine?

Same promise, different day.

Ring him and ask him in the morning ,he rang me at my office in gloucester at 11.15. And i got the same comment from tim freeborn at EVO who said there is no doubt that more GS machines have been installed but the question is how far are they from ten or + so that they can make a worthwhile rns. and there was nothing price sensitive in what he said as the city knows that they are in a 12 month deal to supply asda which started in july and it will be 200+ machines

by the way i was short until today , and i beklieve we will hear in the the morning that simon c has closed his short today.

PM1

Your response to my enquiries re Ossid was justified because I missed the date of the release. This is no personal attack on yourself. I am on a mission to get as much totally objective posting on this board so that people have balanced information on which to base their investment decisions.

To this end I shall be questioning everyone, no matter which side of the tracks (in their investment strategies) they are, about the details in their posts and by doing this I hope to provide a middle of the road service to readers of this and other boards.

Hope you understand.

The oily one

Eric

Another great and well reasoned post which said so many things that I have been unable to articulate myself.

Pity more people cannot make such thoughtful and thought provoking posts as your and a couple of others.

The oily one

Well, I think a new rabbit will be pulled soon. It will die, just like the share price. Have you not noticed that whenever the price drops a new rabbit is pulled from hat? Latest being the cigi-filters. Keep an eye on that, and watch it die too..

Oily Hi,

Ok, that sounds fair to me, just be careful how you question though, as you might know I had another run in with oblomov for just this reason, because to imply things with your question(like you implied I was being deceiful) is not middle of the road.

Ask questions by all means, but please leave ALL the answers to the person you are aiming the question at, and then you will be considered to be in the middle ground :)

Verifying facts is also a good thing to do before questioning, and you can see that 99% of my posts contain verifiable information, and anyone is welcome to e-mail me to discuss anything else.

Cheers,
PM

PM1

I shall be truce to you if you are truce to me!

The oily one

Niels Hi,

Stop reading Watership Down before bed .... LOL !

Will it be a Wal-Mart Wite Wabbit or an Albertsons Albino ????

Cheers,
PM

Oily .... LOL !