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Sunday, 1 July 2007

Finally, I let go of Surface Mount Technology on 29th June 2007

For reasons I do not know, Surface Mount Technology, SMT's share price have recovered to a level where I can let go and break even (including covering trading cost). I already identified SMT to be one fighting a somewhat losing battle in the ultra competitive EMS solution business. With escalating cost of business, pricing pressure and without a clear strategy or ability to compete, the profit erosion is inevitable.

Whether there is anticipated turn around in SMT or due to speculative forces at work resulted in the escalating share price. Despite this, I am not prepared to hold on to SMT. From what I could see, there is no change in business fundamentals to justify the market revaluation. I am already happy to get out without losing a cent on SMT (excluding time value of money holding SMT for 9 months). I exited at 46.5 cents and it closed that day at 49.5 cents.

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