CATP Numbers - Part 3
Accepting the following guesses:
1999 Fiscal Revenue - $500 - $600 Million
1999 Fiscal Earnings Per Share - .60 - .70
We have multiples at the current $11.50 share price:
Price - Sales - 1.11 to 1.33
Price - Earnings - 16.4 to 19.2
These are very reasonable, even favorable, multiples to pay for this company, which operates in a reasonably profitable (not as great as the past numbers, which were inflated by aggressive / deceptive accounting implied) growing business.
If we subtract the cash hoard of $100 million dollars, we have even more favorable multiples. The cash is a strong draw for a potential takeover, and allows the suitor to justify higher multiples on the takeover price. I would guess that CATP would command at least 2 times sales + cash hoard on a takeover, equating to about $1.2 Billion, or about $21 dollars per share. This is probably conservative for a takeover valuation, as typically the market price for shares should be valued at 2 times, and the suitor pay a premium, but CATP isn't in the best graces with the market as we know..
Anyway, takeover or not, the current valuation of $666 million is attractive.
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