Here ya go Rande...just a little math I did on ZNDT..for entertainment purposes...gonna share it with the rest of my freinds on SI. Care to check my math?
I have a killer value investment if anyone is interested.
The company is called Zindart...ticker (ZNDT)
Intrinsic value for this company is approximately $35 per share. The company has made an average of 1.32 per share (per year) averaged over a 14 qrtr period.
That is nearly 11 million dollars per year on sales of approximately 119 million. They get a return on equity of over 16%, and a return on assetts of aprox 11%. WHile the float is small and the stock could be a fast mover, that is NOT the play here.
Given that they make good money and get a great return on this retained capital, this is a long-term fantastic growth stock. The type of stock Warren Buffet would snatch up a position in to get on the board.
They have 16.5 million in cash on hand...
Industry P/E average is 52 +/-...that's a fact, so let's be extremely conservative, and assume 1/5 of that....at 10 for now.
1st year....
16,500,000 ex. cash + 10,875,000 oper.earnings = 27,375,000 x 16.42% ROE = 31,864,000 cash in first year. Actual earnings total = 15,364,000 x P/E of 10, moves cap to 150,364,000 divided by 8.15 m shares = share price of 18.44 per share.
2nd year...
31,864,000 cash + 10,875,000 oper. earnings =42,739,000 x 16.4% ROE = 49,748,196. Actual earnings = 17,884,196 x P/E of 10 moves cap to 178,884,196 divided by 8.15 m shares = share price of 21.94 per share.
3rd year...
49,748,196 cash + 10,875,000 oper. earnings
=60,623,196 x 16.4% ROE = 70,565,400. Actual earnings = 20,817,204 x P/E of 10 moves cap to
200,817,204 divided by 8.15m shares = share price of 24.64 per share
Use this formula and go 10 years out, the stock is worth 73.94 per share. (a 24.9% compounded annual return over 10 years, or 10% above Warren Buffet's recommendation of a minimum of 15%)
Now, back up a second, assume a P/E of 50, which is the industry standard right now in this bull market, and the price = $369.75 per share, or a compounded annual return of 46.7%.
Either way you look at it, if you assume this company stays flat on operating growth (which they won't)and that we enter into a bear market (which we will), the bare minimum return for this investment should be 24.9% compounded annually, and the assumed maximum
would be 46.7%. Buy some for your children and look at it in 10 years. I have a hunch it will blow away my "conservative" estimates. But even if it falls in line, it is a great investment, and you should have a few of them set aside for your future. What is wrong with the stock right now??? The float is controlled by idiots.....that's it.
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