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Gold/Mining/Energy : Signature Brands Ltd.: (SBX:TSE) SGNTF
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To: Syl98 who wrote ()5/26/1999 4:01:00 PM
From: Syncrude   of 776
 
Valuation post from Stockhouse:

It looks as if a post made by Huckelberry on StockHouse on May 19 (number 262944) was fairly accurate in regards to valuation:

"I estimate that CDNOW trades with a Price to Sales Revenue ratio of 3.7485x.
Based on the little we know of CDPlus.Com, I estimate that its 1999 Revenue will be about $95million (current plus
acquisitions plus growth). After the dust settles their will be about 285 million shares, giving a sales to revenue number of
0.3333 (95/285).
Now if CDPlus was a pure internet retailer, we could simply apply CDNOW's P/SR and come up with a valuation of $1.25.
Unfortunately, it isn't a pure e-tailer and most of the existing revenue is from stores. Assume that 90% of the fwd revenue is
from brick and morter and the remaining 10% is from the web site. Accord the b&m a P/SR of 0.6 and accort the web sales a
P/SR of 3.7485 and you end up with a weighted average P/SR of 0.9149. If you multiply that adjusted P/SR to the
revenue/share number you end up with a valuation of $0.31.
Maybe the market isn't so dumb after all! "

Mind you, the approach taken can be debated, but it comes closer to what the market has said so far.

That post was made at a time when a few people were jumping up and down thinking that this was an Internet deal that would shoot up!
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