TROY - even more reasons why Troy Group is a SCREAMING buy:
The end of the post summarizes why TROY is worth AT LEAST $100 per share.
1. TROY's e-check technology can substantially increase sales at almost any large online store (details are given below).
2. TROY's nearest competitor, CKFR, has a price earnings ratio (PE) of 525. TROY's PE is 45. If TROY sold for only HALF of CKFR's value, TROY's price would be $150 per share. Note that CKFR does not have a version of TROY's most important new product, e-checking.
3. TROY's chart is a technical analyst's dream come true. It smashed through a triple top at 18 1/2. after that, virtually every day for weeks, TROY opened higher than it closed the night before.
4. For the past two quarters, TROY's earnings per share grew at 30% per quarter. Projected future earnings per share growth is well over 100% this year. And this with a PE of only 45!
5. TROY's earnings last quarter come in 23% higher than ANY analyst predicted.
6. TROY is ranked as a strong buy by EVERY one of the few analysts that know about it.
7. TROY's price is still so low because it is largely undiscovered. Average daily volume is under 100,000 shares per day. No large brokerage firms have analysts covering it yet. Few people have caught on yet that TROY has made the transition from a boring paper & ink company to a hyper fast growing SUCCESFUL, HIGHLY PROFITABLE e-commerce business!
8. TROY is not a fly by night bulletin board or small cap stock. It trades on the NASDAQ, and has over 200 employees.
7. TROY has a low float, of only about 2.5 million shares.
8. Yahoo's automated research page, biz.yahoo.com
ranks TROY as the number 1 best buy in its industry.
9. Yahoo's research page also notes that the average PE for stocks in TROY's industry (which it lists as computer peripherals) is 104. This means TROY sells for FAR less than average firms in its old industry - firms without ANY of the enormous advantages TROY has. Moreover, With e-checking, TROY is moving to the B2B and B2C industries in which most stocks have far higher average multiples.
10. TROY recently signed big deals to sell its echeck services to Ameritrade (AMTD), Mydiscountbroker.com and ShopSports.com. MANY more such deals will be inked in the next few months, because TROY's technology can increase sales substantially at virtually any large online store or brokerage.
11. TROY's amazing recent growth doesn't even include these e-check deals. that growth is mainly from TROY's printer server software business (mainly highspeed printing of checks). That business includes deals with HP and IBM.
12. e-checking is a way of paying for online services by an electronic check instead of credit card. It's useful for folks that don't want to use credit cards online, and for the growing number of lower middle income consumers who are coming on line but don't have credit cards.
see echecksecure.com
Why would ANY online retailer not want to increase their potential market to non credit card users by accepting e-checks with TROY? TROY handles & guarantees the transaction, for the same fee that credit card companies charge.
13 TROY's 4th quarter revenues per share were $1.59, up over 120% from a year ago. Even if we ignore ALL echecking revenues and just project future revenue growth to match past growth, we'd get annual revenues per share of approximately $18. With echecking, NEXT YEARS REVENUES PER SHARE ARE HIGHER THAN THE CURRENT SHARE PRICE!!! In other words, TROY's income next year will exceed its current market cap.
14. A similar calculation based on earnings yields a next year PE of under 15.
16. Why would firm's use TROY's echecking, and not someone elses? Well, at the moment, TROY is the only firm offering this e-check package. More generally, TROY is to checks what Master Card is to credit cards. TROY is the big fish in the little world of high speed business check solutions. TROY has arrangements with HP and IBM in this area. Every social security check in the United States is printed by TROY.
If you're an online store, do you offer MasterCard or Joe-shmoe's credit card? Similarly, if you're an online store that offers e-checks, you'll to use TROY.
17. Here's why e-checking is so important: Many people either don't have credit cards, or can't use them because they are maxed out, or just don't want to use them for online shopping. The same type of shopper who doesn't want to use a credit card online is even less likely to use a high tech substitute like a cyber-wallet.
What these types of shopper's are most comfortable using, other than hard cash, are ordinary bank checks. Want proof? Just think about how many times you've stood behind a check writer in the grocery store. Grocery stores bribe people with discounts to use their store cards, yet many shoppers still prefer to write a check.
TROY sells e-checking technology that lets online shoppers pay by check. The buyer types in the same info that would be written on their check, and actually receives a paper check for the transaction in his monthly bank statement along with his other ordinary checks, just as if he'd written the paper check himself.
For the seller, the transaction is the same as if the consumer had paid by credit card (except that a check is printed and deposited). TROY's insurance guarantees the check and provides the funds instantly, so for the seller it's just as good as a payment by credit card. TROY's fee for the service is also about the same price that the credit card company's charge.
No doubt hundreds, if not thousands, of large online stores will adopt the technology. Why wouldn't AMAZON.COM and all the others want to increase sales by 10, 20 even 30 percent? These are independent estimates of the potential number of online shoppers that don't or can't use credit cards online.
THE BOTTOM LINE:
Even if you ignore TROY's number 1 rating,
and ignore its phenomenal growth rate,
and ignore its e-checking deal with Ameritrade and others,
and ignore the likelihood of future such deals,
and ignore its expanded relationship with HP,
and ignore the strong buy rating from every analyst that covers TROY,
and JUST give TROY the average PE of its old industry (which excludes e-checking),
Then TROY's price would be $62 per share.
Accounting even conservatively for the other factors above would easily make TROY worth $100 per share.
and if TROY had the same PE multiple as its closest competitor, TROY stock would sell for over $300 per share. |
