Saietta Group (LON: SED) shares have not been one of those happy investments this past 12 months as they're down 65% over the period. On the other hand buying in one month ago would have produced a 157% rise. That doesn't make up for long term holders of course, that's not the way percentages work - the denominator is different here and the rise doesn't outweigh the fall. On the other hand if SED is continuing to rise - another 23% on Thursday - is it possible to say that a definitive change has happened at Sietta?
The business background should be highly positive. Making electric drive trains in this environment as we all go green and EVs storm ahead should be a very useful business line to be in. But as the experience earlier in this past year shows being in the right and fashionable sector is only one part of the battle. It's still necessary to actually gain the paying business from that sector as well.
Saietta Group share price from London Stock Exchange
The revival started when Saietta announced that they'd sorted pricing and volume commitments in the Indian market with a first tier contracting partner. SED then announced that it was AVTEC who were that supply chain partner. In effect, they were getting their supply and manufacturing chain sorted. That's only half the battle of course, it's also necessary to find customers. That's the part that the latest announcement goes some way to aiding, where Saietta announces a significant (given the size of the company) US order.
An order worth roughly £5 million is indeed significant for a company of Saietta's size.
The question for us out here is whether this is enough? We can imagine that the corner has truly been turned, that the supply chain is in place, that customers seem to exist. Therefore, being in that fashionable market, stonks is the limit and all that? Or, equally, we might think that this is early days yet, we need to see a more significant amount of business flowing through. And, perhaps more importantly, we need to see that the supply chain actually delivers to order and on time and price.
