"Does anyone have any insight into the legs on Riva Star?"
@paradigmus,
I have no real idea if Riva Star is going to be the next greatest thing or a game changer for SDI. Somehow, I doubt it, so I certainly don't factor in any such outcome into my financial modelling of what SDI's future earnings might look like.
Instead, my default view on something like Riva Star is that it will simply be another one in a series of incrementally new products to emerge from SDI's R&D efforts.
As such, my base case is simply for a continuation of the favourable long-term revenue trajectory (see chart below), and if any one new product provides a step-change in sales growth, then that would be a bonus:
When it comes to ongoing assessment of SDI as an investment, I think it is far more instructive to look at the ultimate financial outworking of ll the aspects of the company (not just through the lens of one particular product, such as Riva Start, but R&D results in a broader, holistic sense; as well as the other operational elements involved in running an enterprise, things like Procurement, Production, Maintenance, Capital Expenditure, Marketing, Human Resources, Risk Management, Working Capital).
As such, a picture that is a proxy for wealth creation, such as the one in the following chart, is the manifestation I seek of a company whose finances are well-manage and which are moving unambiguously is the direction that aligns with the creation of shareholder value:
Note: that favourable trend over the past seven years has occurred in tandem with the company paying out a total of $8.7m in dividends which have increased at a CAGR of a whopping 29% (admittedly off a low starting base); so it's not as if the improvement in Net Current Assets has been driven by reduced capital returns to shareholders; in fact, it is a case of the exact opposite.
SDI Price at posting:
59.5¢ Sentiment: Buy Disclosure: Held
(20min delay)
