Sound Global: Lost 17.2% in a day.

Sound Global's chart looks bad and this is probably an understatement.

The black candle formed today is probably the ugliest I have seen in a long time. Gapping down and breaking through all the MAs, it was a headlong plunge.

Could we see share price sinking even lower from here? It looks like it could happen with the MACD diving steeply into negative territory and if it should happen, the next level of support is at 49c.

Fundamentally, I am concerned about the higher finance costs but they are not so destructive as to sink the company. It is still a very profitable company.

My estimate is that EPS could reduce some 20 to 25% this year, everything else remaining equal. If Mr. Market is unhappy with this, he could send share price back to test the low of May 2012 at 45c a share. With the estimated reduced EPS in mind, at 45c, we would be looking at a PER of 9x.

See Sound Global's financial statements: here.

Related post:
Sound Global: Full divestment.

Following comments in ASSI.

In the last few months, I received quite a number of emails asking me how could readers be notified when new comments are posted in ASSI. This is because, quite often, I would provide more information simply by commenting in certain blog posts.

For readers who visit my blog daily, the easiest way is to check the sidebar in the section labelled "RECENT COMMENTS".

For readers who only want to visit when there are new comments, go to the top of my blog and you will see, on the right, two small orange color boxes. These are RSS buttons. You could subscribe to all "Comments" and "Posts" by clicking on these.

For readers who only want to be updated when comments are made in specific blog posts, go to the blog posts, scroll down and you will see "Subscribe to: Post Comments (Atom)". Alternatively, if you click on "Post a Comment", you will come to a screen where you could post a comment and tick in a little box below "Email follow-up comments to XXXXXX".