Dear Elroy,
TIME FOR CLASS!!!!!!!
"Math And Investing: Prerequisite: A 4th Grade Education."
LESSON #1
What does th "ps" in "eps" stand for?
That's right ......."Per Share"
Note: the following requires the use of.... DIVISION .....DO NOT TRY THIS AT HOME.
In Q2 1998, IFCI earned $1.9 Million dollars. To calculate EPS you must know the # of SHARES outstanding.........pssst...that's what the "s" means in eps......
Well in Q2 1998 IFCI had 23,567,998 FULLY Diluted shares.
IFCI stated that they did not foresee an increase in the # of shares outstanding, currently 30,000,000, between Q1 99 and Q2 99.
ALERT !!!!:THE DIVISION COMES NOW.
If IFCI earns the lowest of all estimates it will earn .08 cents PER(DIVISION HERE>>>) share. Now if there are 30,000,000 shares outstanding that would mean they mad $2.4 Million dollars.....Lets see thats $500,000 more than they made in Q2 98 and .....DIVISION...... 500,000/1,900,000=26% EPS Growth.
Lets apply that growth using the trailling 4 quarters
Trailing 12 month earnings:
Q2 98: $1.9 Million With 23 Million Shares oustatnding**
Q3 98: $2.3 Million With 27 Million Shares Outstanding
Q4 98: $5.3 Million With 27 Million shares Outstanding
Q1 99: $2.2 Million With 30 Million shares Outstanding
Q2 99: $2.4 Million with 30 Million shares Outstanding*
*With the same 30,000,000 shares out there and using the lowest of the estimates of .08cents.....30,000,000 x .08 = $2.4 million,
26% Growth in earnings. Since IFCI seems finished with large % share dilution ( Remember the warrants ) using a constant 30M shrs outstanding.........you could arrive at;
Q1 99 = 2.2M
Q2 99 = 2.4M
Q3 99 = 2.9M (Q3 98 2.3m x 1.26 = 2.9)
Q4 99 = 6.7M (Q4 98 5.3M x 1.26 = 6.7)
Throw in a conservative $2 Million for recent 99 aquisition and you get:
FY 99 earning total :
$16.2 Million w/30M shs out. $0.54 per share
FY 98 earnings total:
$11.3 Million w/27M shs out. S0.42 per share
Now adjust 98 for current shares count FY 98=0.38
EPS Growth rate is actually .54-.38=.16/.38= 37% growth rate.
All this using the lowest analysts implied growth rate for Q2 of 26% as a constant.
** Using constant shs out of 30 million Q2 98 EPS would have been 0.06 cents.....so even the lowest analyst who is calling for 0.08 cents is implicitly forcasting 33% year over year growth
Can IFCI maintain a year over year 30% growth rate we'll have to see.
But to say the is no earnings growth is evidence of a gross misunderstanding of basic Math.
My question still remains
Could some one point me in the right web site to find IFCI "internal growth rate"?
Frank |
