Scientific Digital Imaging; increased to 3.0%

Scientific Digital Imaging (SDI.L AIM All Share, Market Cap £46m, 50p, 3.0% of JIC Portfolio and 0.0% of JIC Top 10)

I am encouraged by the strong performance of SDI since I acquired a holding on 18thFebruary. I have this morning, made it a proper sized position by increasing it to 3.0% of the JIC Portfolio. 

It is close to Finncap’s target price but as I said in my diary entry when I bought the stock, I think it will go a lot further over the next few years. 

My conclusion on 18thFebruary:

Conclusion: To buy SDI one is buying into a buy and build strategy being managed by a first-rate team, with ambitions to grow the company into a £100m + market capitalisation business. I think that it has done enough so far to demonstrate its strategy and its ability to add shareholder value. It looks good value at current valuation and Finncap’s target price of 51p does not look out of order. However, I am buying this as I expect the share price to do much better than that over the next three years or so.  It is not without risk; it is a small company and a poor acquisition could have a material effect on results, the company’s valuation and its ability to do future deals. It is also quite illiquid and one where one should be wary of chasing the share price. A sudden spike up, often leads to profit takers emerging and the share price drifting back. It pays to be patient! I have bought a 1.5% position to start with but intend to increase it to 3.0% in due course. 

I paid 50p per share

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