Newly revised & expanded DD for TROY. Here's why to buy:
THE EXECUTIVE SUMMARY:
Even if you ignore TROY's number 1 rating,
and ignore its phenomenal growth rate,
and ignore how it consistently beats all earnings estimates
and ignore its e-checking deal with Ameritrade and many others,
and ignore the likelihood of future deals with big e-tailers,
and ignore the strong buy rating from every analyst that covers TROY,
and JUST give TROY the average PE of its old industry (which excludes
e-checking),
Then TROY's price would be $73 per share. Accounting even
conservatively for the other factors above would easily make TROY worth
$115 per share. If TROY group had the same market cap as its closest
competitor, TROY stock would sell for over $430 per share.
WHEN WILL TROY'S PRICE SOAR TO EQUAL ITS VALUE?
Troy's price will skyrocket when
1. Any large broker analyst 'discovers' it and starts covering it.
or
2. Troy once again greatly exceeds analyst's earnings projections.
or
3. TROY announces an echeck deal with a large e-tailer
THE DETAILS:
1. TROY's e-check technology can substantially increase sales at almost
any large online store (details are given below).
2. TROY's nearest competitor, CKFR, recently had a price earnings ratio
(PE) over 500, but now reports a loss. In contrast, TROY's PE is 45 and
its earnings are rising. CKFR's market cap is 16 TIMES as large as
TROY's. If profitable TROY only sold for ONE HALF of money losing
CKFR's market cap, TROY would be $216 per share.
Note that CKFR does not have a version of TROY's most important new
product, e-checking.
3. TROY had a big, fast run up on small volume. It then declined,
filling gaps. The decline was fueled in part by an increase in the
float from 2.5 million to a still modest 3.3 million. TROY has now
completely filled all the gaps, and has now firmly bottomed. By almost
any technical measure, TROY is poised to rise again, much higher than
before.
4. For the past two quarters, TROY's earnings per share grew at 30% per
quarter. Projected future earnings per share growth is well over 100%
this year. And this with a PE of only 45!
5. TROY's earnings last quarter come in 23% higher than ANY analyst
predicted.
6. TROY is ranked as a strong buy by EVERY one of the few analysts that
know about it.
7. TROY's price is still so low because it is largely undiscovered.
Average daily volume is under 150,000 shares per day. No large
brokerage firms have analysts covering it yet. Few people have caught
on yet that TROY has made the transition from a boring paper & ink
company to a hyper fast growing SUCCESFUL, HIGHLY PROFITABLE e-commerce
business!
8. TROY is not a fly by night bulletin board or small cap stock. It
trades on the NASDAQ, and has over 200 employees.
7. TROY has a low float, currently at 3.3 million shares.
8. Yahoo's automated research page,
biz.yahoo.com
ranks TROY as the number 1 best buy in its industry.
9. Yahoo's research page also notes that the average PE for stocks in
TROY's industry (which it lists as computer peripherals) is 122. This
means TROY sells for FAR less than average firms in its old industry -
firms without ANY of the enormous advantages TROY has. Moreover, With
e-checking, TROY is moving to the B2B and B2C industries in which most
stocks have far higher average multiples.
10. TROY has signed big deals to sell its echeck services to Ameritrade
(AMTD), Mydiscountbroker.com, ShopSports.com, A. B. Watley, and
ScoTTrade.com. MANY more such deals will be inked in the next few
months, because TROY's technology can almost costlessly increase sales
substantially at virtually any large online store or brokerage.
11. TROY's amazing recent growth doesn't even include these e-check
deals. that growth is mainly from TROY's printer server software
business (mainly highspeed printing of checks). That business includes
deals with HP and IBM.
12. e-checking is a way of paying for online services by an electronic
check instead of credit card. It's useful for folks that don't want to
use credit cards online, and for the growing number of lower middle
income consumers who are coming on line but don't have credit cards.
see echecksecure.com
Why would ANY online retailer not want to increase their potential
market to non credit card users by accepting e-checks with TROY? TROY
handles & guarantees the transaction, for the same fee that credit card
companies charge.
13 TROY's 4th quarter revenues per share were $1.59, up over 120% from
a year ago. Even if we ignore ALL echecking revenues and just project
future revenue growth to match past growth, we'd get annual revenues
per share of approximately $18. With echecking, NEXT YEARS REVENUES PER
SHARE ARE LESS THAN HALF THE CURRENT SHARE PRICE!!! In other words,
TROY's income next year will equal more than half its current market
cap.
14. A similar calculation based on earnings yields a next year PE of
under 20.
16. Why would firm's use TROY's echecking, and not someone elses? Well,
at the moment, TROY is the only firm offering this e-check package.
More generally, TROY is to checks what Master Card is to credit cards.
TROY is the big fish in the little world of high speed business check
solutions. TROY has arrangements with HP and IBM in this area. Every
social security check in the United States is printed by TROY.
If you're an online store, do you offer MasterCard or Joe-shmoe's
credit card? Similarly, if you're an online store that offers e-checks,
you'll to use TROY.
17. Here's why e-checking is so important: Many people either don't
have credit cards, or can't use them because they are maxed out, or
just don't want to use them for online shopping. The same type of
shopper who doesn't want to use a credit card online is even less
likely to use a high tech substitute like a cyber-wallet.
What these types of shopper's are most comfortable using, other
than hard cash, are ordinary bank checks. Want proof? Just think about
how many times you've stood behind a check writer in the grocery store.
Grocery stores bribe people with discounts to use their store cards,
yet many shoppers still prefer to write a check.
TROY sells e-checking technology that lets online shoppers pay by
check. The buyer types in the same info that would be written on their
check, and actually receives a paper check for the transaction in his
monthly bank statement along with his other ordinary checks, just as if
he'd written the paper check himself.
For the seller, the transaction is the same as if the consumer had
paid by credit card (except that a check is printed and deposited).
TROY's insurance guarantees the check and provides the funds instantly,
so for the seller it's just as good as a payment by credit card. TROY's
fee for the service is also about the same price that the credit card
company's charge.
No doubt hundreds, if not thousands, of large online stores will
adopt the technology. Why wouldn't AMAZON.COM and all the others want
to increase sales by 10, 20 even 30 percent? These are independent
estimates of the potential number of online shoppers that don't or
can't use credit cards online. |
