Hey all,
I am a new SI member, but I have been lurking for a few months on several threads. I have been an FAMH shareholder since last November and have basically joined SI to post on this thread. Here is what my DD tells me (please correct me if I'm wrong - as if I needed to say that!):
1997 sales: approximately $8M
1997 net earnings: $1.455M
1997 average number of outstanding shares (see below): 13,000,000
1997 EPS: $0.11/share
1997 net margins: 18%
I think (I may be wrong) that all the confusion about gross margins/EPS/etc. is because the average number of outstanding shares have always been assumed to be 23,000,000. I don't think this is correct. I back calculated my 13,000,000 number based on written data supplied by PFM. Granted, everything was unaudited.
My most recent information on the current number of outstanding shares is 36,000,000. Some people may be saying: "36,000,000!!!!! The company is killing the 1998 EPS by issuing so many shares!!!!" (Notice I said "The company" instead of "Ira" - Ira does not make all the decisions for FAMH.) Now, don't get too excited because, although I do not know exactly "who" was issued "what," I think the additional shares were well "spent."
Now, lets look at 1998's estimated EPS. Here is what my DD shows:
1998 sales from existing FAMH offices, plus new FAMH offices: $12M
Net profit margin on the $12M: 17%
1998 sales from Myriad: $65M
Net profit margin on the $65M: 4.3% NOTE: Currently, Myriad shows a profit margin of 3.3%, but I think FAMH can increase the net margin since, with all acquisitions, things like IR, PR, billings, etc. can be streamlined for the parts of the "new FAMH."
1998 sales from other acquisitions: $21M
Net margin from other acquisitions: 5% (purely a guess, based on the assumption that one would acquire companies with a decent profit margin, or look for great deals [e.g., Myriad])
So, for all of 1998, we have total sales of $98M, and a net profit of $5.9M. I would expect the issuing of shares to slow down, and have an average number of outstanding shares for 1998 of approximately 40,000,000. This gives an EPS of $0.15. I remember that someone posted this 0.15 figure based on a conversation with Ira. Since it happened to match my own DD so well, I thought I would join SI and let people know how I calculated it.
Either way, I see this stock as well undervalued and think a base of $1.00 to $2.00 is reasonable in the next year. I also think that the EPS will grow tremendously after 1998, and I think FAMH is a good (albeit risky - as every OTC:BB stock is) long term buy. I am long on FAMH.
Of course, I may be wrong (I have been in the past). Of course, I may be right (I have been in the past).
Digest this and let me know what you think.
-Dave |
