Yes, I had seen the news before, too, but the version I saw didn't contain those remarkable estimates. You are correct that Hyundai will keep a significant part of the revenues, but on the other had, Korea is only one market. If the sales next year are $100 million, and VIAD gets to keep half, but Korean sales account for only 1/4 of VIAD's global sales, then VIAD would have sales of $200 million, or say $50 million a quarter. That is 10 times the current sales rate. Even if VIAD's PSR multiple doesn't expand, but rather just remains constant, that would imply VIAD at 10 times the current price in a year. In this crazy market stocks with 10x sales frequently have PSR's of 30 or more, which implies SGNT at 350. And if the Korean market is only 1/8 of the global market, could the stock go to 700? Who knows....
After doing a few computations based on the article I went ahead and averaged up at 13 3/16 and 13.5 today, and I may buy more tomorrow.
Carl |
