Brad,in regards to earning projections: how in the world are these figured?
<<<<1998 EPS Projection: Projections are based on including revenues from the acquisition of Myriad Employment ($60 Million), 5 - 7 additional offices (either acquisitions or new offices planned for 1998). Firamada expects a growth rate of 23-30% which exceeds the industry average of 19-24%>>>
I know math gets in the way of cheerleading, but here goes: A 30 percent growth rate in earnings from this year (using FAMH figures and a steady stock amount) would mean about $1.4 million more in earnings next year, according to the unaudited financials.
So, if the $60 million in new revenues boosts total earnings 30 percent (by $1.4 million), that would mean the profit margin on the acquisitions would be about... 2.3 percent! Or, if the companies acquired would bring in more than 2.3 percent, the earnings from current FAMH business,(including the projected 5-7 new offices!)would have to shrink to post the same net earnings.
Did you ask why these margins would shrink? What happened to the "60 percent returns" of last year? Are they not real?
As usual, the numbers make no sense. Can't they make at least 3 percent on revenues an easier way, without assuming millions in debt?
Of course, my calculations are wrong if FAMH figures mean that margins will be higher, while they at the same time issue lots of new stock. Which would happen first? A stock dilution or next year's earnings? My money (unfortunately) is on the stock dilution.
So: really low profit margins on the new stuff, or lots of extra stock issued. Please ask Ira which it will be.
BTW, I would glad to sell you my stock for, say, $1.50 per share. Nice to know you are happy about the stock falling. Buy all you want, and someday I may be able to make a profit on mine. |
