That is correct. Also, please help me with the following arithmetic:
Data from my earlier post which came from RB which was copied from the IR site.
FUJI F. now produces approx max 20,000 batteries a month.
SETO stated they expect to increase production 400% within 12 months.
This means FUJI F. will produce 80,000/units month in the near future.
Assumption: If the net profit per unit is $10.00, that means the battery division alone will contribute $9,600,000 in net profit to SETO (80000 * 12)* 10 = 9600000. Now assuming the other divisions kick in say, another 1000000 net, that gives a total net profit of 10,600,000.
Now if divide 10,600,000 by the number of SETO shares (approx 11,000,000) we get an approx EPS of approx .96/share.
If you go to the IR site listed in the post, the IR gives SETO a PE of 40.
Therefore, the fair market value of SETO would be .96*40 = $38.40 in the very near future.
Of course, the above in-depth analysis was performed under the following assumptions:
1) SETO sells 80,000 units/month at full production
2) There is a $10.00 net profit per battery sold (average)
I remember from an earlier post that a gentlemen stated that a $10 margin was about average in a cell-phone battery sale.
I would dare say that SETO looks like a promising investment and is worth buying a few shares. But then again, maybe I'm "missing the boat" on something. |
