Here's a good NDB comparison from the Yahoo board:
messages.yahoo.com@m2.yahoo.com
Based on a comparison EGRP, AMTD and NITE, NDB is worth about $104 per share -- it is trading currently at $27.50 per share.
Examine the following information that I pulled from the most recent 10Qs of NDB, EGRP, AMTD, and NITE as well as general information from Yahoo:
NDB
Trailing P/E = 25
Market Cap = $385 million
Revenues from trade commissions for Q ending 11/98 = $9.5 million
Revenues from MM/trading for Q ending 11/98 = $35 million
EGRP
Trailing P/E = N/A (company is in red for last 4 quarters)
Market Cap = $7 billion
Revenues from trade commissions for Q ending 12/98 = $60 million
AMTD
Trailing P/E = 236
Market Cap = $3.6 billion
Revenues from trade commissions for Q ending 12/98 = $36 million
(Did you know that $23 million of AMTD's $61 million in Q revenues was INTEREST INCOME)
NITE
Trailing P/E = 69
Market Cap = $3.5 billion
Revenues from MM/trading for Q ending 12/98 = $89 million
PLEASE NOTE: the revenue numbers are Quarterly and were pulled from the last FILED 10Q for each quarter, so this does not account for possible fluctuations from quarter to quarter.
NDB is a both an on-line broker like AMTD/EGRP and a market-maker like NITE.
NDB's VALUE AS ONLINE BROKER
NDB is cleary undervalued given it's low p/e, high growth rate, and low market value per account. However, currently EGRP and AMTD are valued largely based on their revenue – in particular, their commission revenue -- and the growth of that revenue. A quick look at last quarter's results show that EGRP's overall revenues were only about 50% higher than AMTD for last quarter. However, it's commission revenue (which excludes interest income) was nearly 100% higher – which is why IMO EGRP's market cap. is about 100% higher than AMTD.
EGRP is now trading at 116X last quarter's trading revenue. AMTD is now trading at 111X last quarter's trading revenue. NDB is currently trading at 40X last quarter's trading revenues, which is 1/3 the value placed on EGRP and AMTD revenue. Granted, EGRP/AMTD may deserve a higher valuation given their larger market presence and growth rate. But how much is warranted? IMO -- given that NDB has a superior ranking in Barrons, is launching a new site in the next two weeks, and is about to go on a major advertising campaign – at most, they should trade at about a 30% premium to NDB, which would give NDB a value of 80X last Q's revenues of $9.5 million.
CURRENT VALUE OF NDB AS OLB = $54 per share.
NDB's VALUE AS MARKET MAKER
NITE is a marker maker like NDB's unit, Sherwood Securities. As shown above, NITE's trading revenue was a little under 3X the trading revenue of NDB. Yet, incredibly, NITE has a market cap of $3.5 billion vs. NDB's market cap of $385 million (900% more). NITE trades at 39X last Q's revenues; NDB trades at 11X last Q's trading revenue. Given that NITE pays for its order flow (last Q they paid $20 million or 25% of trading revenue), I don't believe NITE should trade at premium to Sherwood. That said, IMO NITE is over valued by 50%. So assuming, NDB trades at HALF the current value of NITE, NDB's trading activities should be valued at 20X last Q's trading revenues.
NDB VALUE AS MM = $50 per share ($100 per share if you accord it same valuation as NITE)
COMBINED VALUE = $104 - $154
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