Isoman, Revised Earnings Estimate
I think there maybe a problem with your earnings estimates. Let's look at them one by
one.
Real Money Center
400 million a year in mortgage closings (this is not revenues or earnings)
Revenue is 3% X $400M = $12M
Belize mortgage business $120M mortgage closings (this is high, they will not close
$10M a month)
5% signing fee $6M
2% maintenance fee $2.4M
Costa Rica potential $120M in mortgage closings (we know there are much more -
$600M potential)
5% signing fee $6M
2% maintenance $2.4M
IT estimate as per news release $18M( we know this is low, closer to $65M)
Revenue = $18M
Total REVENUE = $46.8M
Total EARNINGS = $11.7M (using 25% as net earnings margin)
EPS = $0.019
P/E Multiples
10X = $0.19
20X = $0.38
30X = $0.58
I believe the S&P runs about a P/E of 20.
The $10M a month for Belize looks shaky because they don't have that many homes.
Who knows when Costa Rica will start, but it seems to have a much larger potential.
The IT estimate is obviously low assuming they market it properly. Lastly, Real Money
seems plausible.
Other acquisitions? Who knows what they will bring in?
There is no question that we are undervalued, but it will take regular earnings reports to
bring this stock up to it's true value.
Comments?
GG
Ok, You said, that Belize will most likely not do 10 million in mortgages a month. You could be right, you could be wrong. What we know, is that they will write some mortgages, and it should continue for quite some time. for now let's leve the estimates as above.
Costa Rica. You said my estimate was low, and probably closer to 600 million in mortgages. I agree again, but I kept the estimate low, to offset any deficiency in both countries (Belize, and costa)
Real Money. I know 400 million is not earnings. The going rate for mortgage business in vegas ranges fro 2% to 10% of the mortgage, depending on the complexity. I took 3% as a low average.
400 million X 3% is 12 million (I did put that down so we agree here)
IT estimate for sales on the press release was 18 million( You said it probably would be higher.) I agree, but...I like to err on the side of caution so I put 18 million as the estimate, with 25% as NET earnings.
so...if you ad 12 million (Real money gross commisions)
8.4 million (Belize)
8.4 million (Costa Rica)
18 million (Gross sales, IT)
Total Gross sales = 46.8 million
46.8 million divided by 610 million shares =
7.6 cents per share gross sales.
Now I don't know what the profit margin is for a bancorp. I know of a credit union in Toronto , that is similar, sort of, only that it'
s business is strictly in Ontario, and they don't have the Trading company, but they boast a net profit of 42%.
So let's keep the net earnings down to 25% of gross, shall we.
or 1.9 cents per share.
ALL AGREED?
of course, as more details come in, we'll be able to narrow this down more.
Pink Pig, isn't a huge expense for PanAmerican, but I can see it generating a lot of interest (The websites, that is) |
