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

To: Lazarus who wrote (46831)	3/2/2012 12:21:21 AM
From: E_K_S	Read Replies (1) \| Respond to of 78520

Re: INTEGRATED MGMT INFO (INMG.PK) Market Cap: $10.5M PE= 12.4 Annual Revenues: $4.05M Gross Profit Margin: 57.9 % Hi Lazarus - Glad to hear from you again. I recall INMG from your earlier post and am glad to see that they are growing their revenues and actually making money. In fact, with a 12.4 PE on over $4M of revenues is pretty good. It's hard to quantify the actual "value" opportunity here as this is a small, growing company w/ few hard assets. There are two main liabilities they have in (1) SBA loan and (2) a private note. They seem to be growing their revenues through different reoccurring revenue streams to cover these notes and their other fixed expenses. In fact, other than their RFID cattle tags, they really do not have any significant Cost Of Goods sold. Most of their current revenues come from on-site one time audits that result in a certification. The industry is new and appears to be necessary if a client wants to export food products (mainly Beef & Pork) to other countries (Asia - Japan). The tracking and certification of product from farm to store is something they are "branding". Building this brand is the intangible that has lots of possibilities and INMG has been exploring many of the revenue streams that will grow their business. The principals (husband & wife) appear to be the main officiers each w/ $90K annual employment contracts. Their Web site shows 10 other employees that provide varies consulting services (http://www.imiglobal.com/IMITeam.html). So, it is not clear to me if company growth is dependent on hiring more employees to do consulting and one time audits and/or needed to complete company re-certification audits. The key is for them to build a base of customers that require at a minimum annual re-certification audits that can be charged some type of monthly reoccurring subscription fee. The consulting business is very profitable but to build a business you must build your client base and have a revenue model that provides for continued billing of services. They are looking to expand their certification "brand" vertically where perhaps they can generate other revenues/fees through that channel. To summarize, this is a hard one to value as their service is dependent on a certification "brand" they are promoting and building. Does the company have a working business model that can sustain 30% growth in revenues for years? If they have built an effective technology based tracking system (w/ RFID tags and intelligent Web concentric database) it's possible especially if repeated every quarter for a few new and very large clients. I have them on my micro-cap watch list to monitor their news announcements. For me it is important when building a brand (especially one that requires a certification) get lots of publicity from press releases and stories. I am not sure this is one I would invest in but it's worth watching. EKS