Interesting situation in Australia:
- Listed Law Firm Shine Corporate Ltd halves their profit forecast.
- Stock down by 70%.
- P/E ratio at distressed level. 10% Cash flow yield for a relatively resilient business.
- Significant value opportunity at AUD0.56, assuming there is no more additional unexpected writedown and no additional hit on the back of early investors suits.
- Interesting asymmetric gain potential vs. risk of loss
- Unfavorable outcome of the E&Y accounting review and additional writedown.
- Fines and suits from early investors.
- Senior lawyers leaving to save their reputation and bringing business to other Law Firms.
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in SJH over the next 72 hours.