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Gold/Mining/Energy : Arcon Energy (MIDL Presently) The Ultimate Sleeper
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To: SC Anderson who wrote (264)5/22/1998 2:56:00 PM
From: Crossy  Read Replies (2) of 4142
 
SC,
let me give You a brief method of valuation for new market niches like this thing. I use price to sales analysis to derive this. First of all look to the niche "specialty chemical manufacturers" because this is the area Arcon fits into. They normally trade as Price to sales of between 1-3 depending on profit margin. This one got an edge because DF-144 is patented, i.e. a monopoly for them for many years to come. LEt's use a price to sales figure of 2 to be conservative - in terms of total target sales.

So let's check the total diluted numbers (after the Preferred & warrants will have to be converted) is something like 30 million shares. My price target is just a function of FINAL market size:

Target Revenue Sales/Share MIDL TARGET
$ 100 million $3.33 $6.66
$ 500 million $16.65 $33.33

OK, add the aditional zeroes Yourself. I would say if Arcon's DF-144 will be used by all those interested parties then the $500 million target revenues are WAY CONSERVATIVE..

best regards
CROSSY
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