Guys, thanks for the replies. My feeling is, listing on the OTC-BB isn't a guarantee of anything by itself, and I don't really care how many shares are in the float for the purpose of this analysis. If we don't know what the company's profit margins are going to be, we don't know what their earnings will be. And if they only have, say, $1.5 million in profit, but have 150 million shares outstanding (whether in the float or not), that's .01 per share in earnings. For a business like this, unless it's growing rapidly, I might assign a PE of 10, so the fair value of the stock after a year in which it earns that $1.5 million will be 10 cents.
If they have EPS of $3 million, with the same 150 million shares out, that's .02 per share in earnings. If they're growing, then maybe -- MAYBE -- the stock would then be worth .25 or more.
I see they were profitable in 2007, but not by much -- particularly if you divide that profit over all those outstanding shares.
By the way, no need to worry about my doing my own due diligence. I have a list of 30-40 stocks that I'd buy before ever bothering to consider this one, but I'm slightly interested in watching the reaction (which I think will be a big YAWN) if and when LBWR moves to the OTC-BB. It's a nice little story, and they should be commended for trying to better themselves, but it don't mean squat without EPS. |
