SNX delivered a poor result.....on the surface. When you read...

SNX delivered a poor result.....on the surface. When you read the fine print, it is only then you realise that everything they have reported was already announced to the market throughout the preceding 12 months.

They said last December they were writing down asset values, they also infomred the market about the China difficulties and have merely "written off" the dollars still owing from Top hawk. Additionally - as has been the case for some time - they fully expensed all R&D costs rather than capitalise them.

With regards revenue....once you back out the China reveune ($13.5m last year vs nil this year), you realise that the Australian operations performed similarly to last year. Again...this was something they forwarned the market of back in April when they said they expected revenue of $20m for the full year.

...And it came in at $19.9m.

What the company has done, is strip itself bare of any excess "fat" that may distort the books. There are no hidden surprises and so shareholders & analysts alike can look at the NTA position and know that it is pretty clean.

SNX have not had a very good year...sure...but under difficult trading conditions, gee, I like the way there management takes conservative approach to its accounting. As a result, they are very well placed - and very undervalued - to take advantage of the next upleg in IT spending.

Unfortunately, the China experiment has been a failure to date but who knows, this may yet turn around. If it were to do so, the share price would ignite. However, let's be conservative like SNX management and block this from our thoughts for the moment: the cash backing is $1.14 per share and NTA $1.32 per share.

On that basis it is EXACTLY like CPH and anyone buying it at present may well be laughing in 12 months time. At current prices, the business is valued at less than zero.

Hurry up folks.....in SNX you can currently buy $1 of cash for 66c.

Finally, check out the market depth on the sell side...there isn't a lot available. It seems the short sellers cleared out a week or so ago after those last 2 contracts were announced.

Coop