I thought I'd reprint Liberty's point of view here.
Liberty, of course, is the company hired by Digitcom to do its investor relations.
Of course any investment relations group always thinks any company they've been hired to represent should be trading 50 times current earnings....
And this write up seems dated since .21 earnings/share = 2X earnings as of today.
(The write up must have been written when the stock was $1.20/share -and before this $1 million per month agreement)
Not that I wouldn't love a $9 stock.
My opinion: you don't listen to a public relations rep for what a stock should be valued.
But I say we focus on a hopeful $1 stock for the present and go higher as more contracts emerge.
However, interesting writeup, nonetheless...and I will reprint here:
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Digitcom Interactive Video Network or DiV-N,(DGIV-OTC), is an international long distance service company who works as a partner with local telephone companies to provide the least expensive call
alternatives to that company's customers. Digitcom has developed a
system which will create an entirely new market within the call-routing industry. Their sales force has been active in recruiting local phone companies internationally, and hope to have worldwide deployment within 5 years. Digitcom has patented their software which places them in a proprietary position and gives them a sizable first-mover advantage.
Because of their unique partnering position, Digitcom has been able to
secure better and longer term relationships with suppliers of dialtone. Other callback companies sell the software to these clients in a retail transaction and have a superficial buyer-seller relationship. Digitcom becomes a strategic partner with it's clients, through equity capital, to implement Digitcom's system. This allows Digitcom to access a larger customer base and brings equity capital to the baby bell companies for expansion of their capabilities and client base. Digitcom is able to offer the most competitive rates and eliminate competition due to their patented software. They will receive revenues both from the increased customer flow, and also from the appreciation of the equity stake in the partnered baby bell which Digitcom is helping to build.
On a conservative basis, Digitcom is expecting revenues in excess of $30 million dollars for the next fiscal year. Profit margins have exceeded 14% so far this year, which is excellent by any industry's standard. Their earnings per share were $0.21, which conservatively with a 50X multiple, they should trade at $11.00 per share.
This means they are currently undervalued against industry norms on earnings, as they are only trading at 6X earnings.
They should trade at a market cap of 20X revenues or $100 million plus on the market cap and $9.23 per share. This means they are undervalued against revenues and market cap and should NOT be trading at 3X revenues as they are currently.
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Good Trading!
-DavidCG |
