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Microcap & Penny Stocks : FAMH - FIRAMADA Staffing Services -- Ignore unavailable to you. Want to Upgrade?

To: OpenSea who wrote (933)	1/8/1998 9:57:00 PM
From: Brad	Respond to of 27968

Jim, In the scenario you mentioned (post #933), the $100 million (30M X $3.60) would be the "market cap" for FAMH. Market Cap is not the same as Total Annual Revenue generated by a company. The important thing is EPS (Earnings Per Share). If FAMH has (for example) 24 million shares outstanding and let's say... $2.5 Million in Profits on $8.5 Million in sales, we would have an EPS of 10.4 cents ($2.5M divided by 24M shares = .104). And IF the new big acquisition operates at (for example) a 10% profit, that would mean it would have (in this example) a profit of $6 Million on Total Annual Revenue of $60 Million. For the sake of THIS EXAMPLE (and I really have NO idea what the actual REAL number will be), let's say FAMH issued 14 million shares to complete the acquisition. That would raise the Total Shares Oustanding to about 40 million. So the math would look like this: $2.5 Million Profit from original FAMH operations... PLUS $6.0 Million Profit from the Big Acquisition... EQUALS $8.5 Million Total Profits divided by 40 million shares... EQUALS .2125 (or 21 cents EPS) .2125 X 18 (Avg Industry Multiple) = $3.82 price per share. However, IF Firamada is perceived to be a "high growth" company, it could have a multiple as high as 50 which would put it at... .2125 X 50 = $10.62 price per share. Now, if FAMH reaches a profit range of 20% on $75 Million in Total Annual Revenue, that would be $15 Million in Profit. $15M divided by 40M shares outstanding = .375 cents EPS .375 X 18 = $6.75 price per share... OR if considered "high growth" .375 X 50 = $18.75 price per share. I appologize for throwing out so many numbers, but hopefully the logic it is clear enough to follow. By the way, the scenario above IS STRICTLY AN EXAMPLE!!!! It is NOT intended to represent the ACTUAL situation. I DO NOT KNOW the exact numbers any more than anyone else here. Best wishes, Brad