Gene, I'll take a shot at your question. Of course, this is just my
humble opinion only.
I don't think this stock is being ignored because I believe the price
of TSIG is in line with TSIG current fundamentals. As of Sept of last
year, TSIG only have about 900K in revenue over the last 9 month
period and have negative earnings. If anything, we may be a little
overvalued, but probably not for long, since I'm hoping to get some
PRs with some real numbers. I'm basing my valuation in comparison to
CDNow and N2K; if you use the P/S ratio for valuation purposes, since
all have negative earnings, you'll get the following:
Stock Market Cap Revenue P/S
-------------------------------------
CDNW 351.3 M 43.4 M 8.09
NTKI 211.7 M 32.4 M 6.53
TSIG 22.1 M 0.9 M 24.6
So with a P/S of 24.6, we are valuing TSIG above both CDNW and NTKI.
However, I think this valuation is justified because of the very real
potential of at least 25 M revenue coming in just from the Babe Ruth
deal and because with this revenue TSIG will have positive earnings,
something that CDNW and NTKI won't have. In fact if TSIG should
receive revenue of 25 M, then using a P/S of say 7, we should be at
the following share price:
Market cap = 25 M x 7 = 175 M
share price = 175 M / 57 M outstanding = 3.07
So I expect that TSIG will be at least 3.07 with 25 M revenue from the
Babe Ruth deal. Imagine the share price with revenues from other
deals in the work! On top of this, we'll have positive earnings!!
So I really believe that the sky is the limit with this stock.
I hope I've made myself clear.
tfk |
