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Politics : Moneymade's Champagne Room
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To: Rock_nj who wrote (4632)6/6/2009 9:54:36 AM
From: inchingup  Read Replies (3) of 4703
 
Yes, I did read the pink sheet profile before posting. It always amuses me to look at evaluations of companies that have virtually no assets or positive cash flow and have people tell me they are worth "x" number of dollars just because they are a public company.

Common sense would tell most people that even if a company is turning a profit of oh, let's say $250K annually it is highly unlikely that that company would garner more than a $1-1.5MM price in the private sector had it been sold there. (Not including RE and equipment value)

How do I know this. Experience. Recently there were two such companies doing the exact same thing sold in my area one by a friend and one by a relative of said friend. Both sales averaged appoximately 4x annual net profits plus building and equipment.

As this company apparently is now leasing their property the only thing they have stated value on is equipment (as of the last filing), and not a great quantity of it based on that filing.

In one of the recent releases EXPH states:

"Reasonable gross profits and net profits are expected in FY 2009."

So based on the above extremely sketchy profile you believe that a company is worth $12MM? That's pretty far fetched, isn't it?

You also state that a company would usually sell for 3x their annual sales. How did you come by that figure? What if they had annual sales of $10M and earned zero dollars? Would that make the company worth $30M?

Personally, I'd rather own a hot dog stand doing a gross profit $25K per year with a net of $4K. After all, it's profits, not volume that counts.
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