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Sosandar – shares back through 20p, so a hold for me

By Nigel Somerville | Tuesday 10 July 2018

Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Other writers on this fine website (ie Tom Winnifrith!) may disagree, but shares in AIM-listed Sosandar (SOS) are back through 20p, which was my limit price to pick up stock. So once again I move my stance to hold. Flip-flop-flip-flop….but it’s not me, it’s the share price which keeps moving! Whatever, my tip from the UK Investor Show this year is doing very well.

We have standards here on ShareProphets, and the most important for me is that we declare our positions. And that means saying hold when buying is naughty. It also means having a buy stance when looking to sell is very naughty indeed. I wanted to pick up stock at up to 20p. When the shares moved ahead of that before, it became a hold for me and I said so. When the stock slipped back under 20p I wanted to pick up more stock (as funds allowed) so I had to move my stance back to buy. It really is as simple as that – even though I took a bit of a ribbing!

My target price remains 25p to top-slice in the short term, but the company’s first quarter has just finished and I would not be surprised if we got a trading update. After all, the last we heard was record months in March and April – and April was 30-odd % up on March. If that has continued through the rest of Q1 then I’m sure the company will be very keen to tell us as quickly as it can.

We also have FY numbers to March which are due out by the end of September. But given the size of the operation, I doubt it will take six months to put the numbers together. Again, if the numbers are really good then I daresay Sosandar will report them post haste. I don’t suppose that will be during August, when everyone is on holiday. So could it be this month?

My hope is that we will get news from the company before 25p is hit, at which point I will be looking to raise my target. But I’d like to know whether trading is still shooting the lights out, and I also want to know about the cash position. Cynical Bear loves to ask when’s the placing (I get it from all sides round here!). My guess is that it will not need more cash, but some real hard numbers are needed to confirm that. I guess I’ll have to endure more Cynical posts until then.

I am fairly sure that trading will move into profitable territory at least by next March, and then we can start measuring Sosandar’s shares against its profitable peers. That will be fun – and a fun sharp ride northwards, I fancy. But for now we don’t know. It is all guesswork and that is why I want to lock in some gains if we get to 25p before an update.

I consider this a real possibility; I don’t do charting and usually I think it is a waste of time – especially with small/micro-caps. But sometimes you see something and it makes you wonder, and Sosandar’s price chart seems to have a tasty-looking inverted head and shoulders which may target as high as 29p. So a hold at above 20p, and in the absence of news I want to take a bit off the table at 25p or above. Those braver than me will want to hold for much bigger gains and don’t worry – I too want much bigger gains. I just like to see a bit of cash banked on the way there.

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