GRIN (Grand Toys International Inc) Message Board

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Non-Tech : GRIN (Grand Toys International Inc)

GRIN 27.01

0.0%

Dec 2 3:59 PM EST

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To: Dako who wrote (458)	11/18/1999 10:18:00 PM
From: Frank McVerry	Read Replies (2) of 495

dako, <<What is normalized valuation, you ask? Being very kind to GRIN: Given that the far superior Hasbro trades at 15x next year's earnings, give GRIN 12x. On $40 million sales and a generous 5.5% after-tax margin and 3.1 million shares, that's about 70 cents/share. Multiply by 12 and you get 8 3/8. Should be there by year-end.>> This is a legitimate and conservative way to put a value on THE BUSINESS. However, GRIN has no long-term debt (LTD) so the cash accumulating through the August option exercise must be added, dollar for dollar, to this estimate for the business. My year-end estimate for their cash position is $14M (assumes all options exercised plus net profits plus cash 'sheltered' by depreciation). Assuming 3.4M shares outstanding gives $4.11 in cash plus your $8.37 resulting in a value of $12.48, using this very conservative, no growth scenario. Even using the $8M option cash mentioned in the last earnings report, based on a partial option exercise, I still get about $12 per share. Frank

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