Keep in mind that most of the time their contracts are really only worth 10% of the contracted amount. Net. The hydroponics deal should add $400k to the coffers when it's all said and done. And I have no idea how much, if any, of that 1.8 mil from the lawsuit is still there. I've been working under the assumption it was used to settle other debts. We'll know soon enough when the financials come out though...
I've been working with 150M shares because it's a nice round number. Assuming $400k in *earnings* from the hydroponics gig, we get .00267 earnings per share (that's 2 tenths of a cent) times a PE ratio of 15 gives us 4 cents per share for a fair stock price. If most of that 1.8 mil is still in the coffers, the book value (value of the company if liquidated) would be around 1.2 cents.
Assuming nothing about the lawsuit proceeds, we're trading at a PE of about 7 right now. That's extremely low. But, since a PE of greater than 1 is really a premium being paid for the stock under the assumption it will earn more in the future, it isn't likely to change much until another contract is signed, and it's published through one of the wire services.
And, lest anyone think differently, it *does* frustrate me that news of the hydroponics contract didn't get carried on a wire service. Not so much because the stock ended up at 2 cents when it should've been about 4-6 cents right now, but because it was *newsworthy*. However, it frustrates me with Reuters, not with ARET. They're just as surprised as we are that Reuters didn't publish that one. I think that was the thing that prompted them to decide to start using a pay wire service. |
