I need some help here putting together a valuation of C-Cube. When I look at the numbers it just doesn't make sense to me, so I must be doing something wrong.
During the conference call Alex stated that Divi contributed $4.4 million to bottom line (Divi's SLOW quarter). Therefore, $4.4MM/41.3MM shares = $0.107 EPS for slow quarter. At a conservative multiple of 25, Divi alone should be worth ~11/share, assuming flat net revenues for the rest of the year (GIC is at PE of 107 and SFA is at 27, by comparison). Given a more reasonable 15% Q over Q growth rate and 25 PE, Divi should be around $14 to $16/share.
Add $5.00 a share in cash ($230 cash minus 23MM LTO), Divi plus cash is $19 to $21/share. Therefore, the market values the rest of C-Cube at $0. Is this right? C-Cube for FREE? I could buy C-Cube's SCVD, DVD, DVD authoring, Codec, encoder business for nothing? HELP, I must be doing something wrong, or else Cube is one fricken undervalued stock.
Also of note, cube just announced today (and in conference call) 60% of $30 - $40 million dollar professional MPEG authoring business is theirs. So .6 x $30 x .13 (net profit)/41.3 MM shares x 15 PE = $0.9/share, where there was nothing before! What do we get today, down a buck and change!
Other announcements today that must have negative value:
Divi
o Will ship industry leading 5000th encoder to MediaOne in 2Q. An additional 200 encoders by then.
o partnership with Thomcast
o WGBH win
C-Cube
o Divi, GI, NDS to use C-cube encoder engines
o FAST, Pinnacle, Matrox... etc
THIS IS ONE FRUSTRATING STOCK!!! The market roars to excesses the past couple of years while Cube goes nowhere, then Cube pays for others excesses that it didn't enjoy. arghhhhh. As a long time Cube holder, just had to vent, sorry. |
