Simula at $3? Today? Next week? Why? That is a total market cap (including conversions on the debentures, not that anyone will do that when the conversion price is $17.55) of $36 million or so.
So, just the ITS division, expected to do about $32-$33 million in 1999, growing 50%-100% for at least the following three to four years, with operating margins approaching 20%, is worth approximately the entire market price?
I think all of you are crazy. That one division is worth comfortably north of $100 million on its own. Add something extra for government products, something above that for even a "wounded" 16G seating business, and the stock has to be worth at least double the current valuation.
Will it get there in the short run? Nope. Can't happen. Too much tax selling to yearend, and too little market confidence in the management. But, a couple more ITS contracts, or the sale of the rail car business with the proceeds being deployed in buying back stock and debt just might do it.
$3? On the fact of it, ridiculous.
We will see in the fullness of time, gentlemen. |
