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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Wallace Rivers who wrote (28125)	9/18/2007 10:50:10 AM
From: pcyhuang	Respond to of 78748

>what price target you might have on NFI Wallace: The short sellers and other media bashers have predicted that NFI's downside is zero. However, there is also a realistic upside should NFI survive which I think is extremely likely as recent events on the company unfold. I believe that it is realistic to believe that NFI, in a better operating environment, can make at least 25% of its 2006 profits. We already know that 2006 profits were approximately $5.50 per share pre-split. Post split, that equates to $22 a share. So on extrapolation, I seriously believe the new NFI has the potential to make $5.50 a share again, but on the new float of 10M shares which would have been $1.38 on the former float of 40M shares. Assigning a conservative multiple of 6x - 8x earnings, we reach an estimated potential valuation of $34 to $44 per share. This is not a pipe-dream but a very realistic estimate based on historical performance. With a further slight expansion of the multiple or earnings, or both, we have a potential 10 bagger. Now let us put this in terms of the odds of playing a hand of black jack. You have a 11 count and the dealer has a face card up. The odds are slightly in your favor to double down for a single hit. The difference here is that the case of NFI could be a 10 bagger instead of just a simple double. pcyhuang