I would like comments, from Joe Copia for example, on a fair range of values for a penny stock, in the event financials reveal we have a viable company, with significant growth, in a hot sector, which will soon have a NASDQ listing.
While this is extremely speculative, my perspective would be limited to that of a long term investor, since it does not take a rocket scientist for a day trader to figure out what to do if the price jumps up over the short term. But, for a longer term investor, is there any thing to base a stock price range on for a penny stock (soon to be NASDQ listed stock)? Would you look at market capitalization, where there are no net profits (hypothetical only)?
One of my favorites (I do push it, I admit), TSIS, is a nice little stock in a low-tech field, and has only about $2mm revenue and about $15mm cap, for multiple of 7 x revenue. However, revenues are apparently exploding there as well.
Obviously, there are established hot growth stocks with multiples in the clouds, but ZULU has big question marks hanging over it and it is a specialized service business in a competitive internet ad marketplace.
A multiple of 4 x est. revenue (let's say $25mm) is modest and gets us to a very nice price for ZULU, but is that overreaching for a little penny that is battered and bruised from months of doubting Thomases? |
