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Microcap & Penny Stocks : GGNC - GIC/Global Intertainment Corporation -- Ignore unavailable to you. Want to Upgrade?

To: King David who wrote (1824)	1/22/1999 10:13:00 PM
From: StockRanger	Read Replies (4) \| Respond to of 2585

One look at valuation (kinda long). I'm going to use GGNC's PR's for a quick look at what I believe the market will place as a price tag on GGNC. I will preface this with one fact. None of this will happen if they don't become fully reporting to the SEC. The biggest headline this company can release is "GGNC IS FULLY REPORTING". Why? Because it makes the company legitimate in the eyes of the market. All the talk of horses, dice, and dollars is secondary. Without financial data to analyze I can't run all the numbers and ratios for comparison so... I will look at the only thing we have, the company's press releases. The price to sales ratio is the price tag that the market places on a company. Obviously, they vary drastically based on the quality of the company i.e. the front runners. Within this industry I think the main competition is SNMM (they also happen to be one of the only reporting companies). SNMM has a price/sales ratio of roughly 15. Their trailing twelve months sales was $5.26 million (amazingly small) with 22.4 million shares outstanding. They have not turned a profit yet, so no P/E is available. GGNC. If sales are projected at $75 million (impressively large) for the first year with 19 million shares outstanding and using a P/S ratio of even 10 will place a price tag of around $40 on the stock. Projected profits of $11.2 million on 19 million shares is earnings of $0.58 a share. A P/E of 20-30 gives it a price tag of $11 - $17. P/E analyzed alone is meaningless without looking at the earnings growth rate. This is what is the most impressive aspect of the company. On-line gambling growth is increasing exponentially. As most stocks are valued based on future earnings, not trailing earnings, GGNC is in an incredible position. What's this all mean? If their press releases are accurate this stock is going to rocket up once they become reporting. What's keeping the price of the stock down now is the daily fears that this might all be hype in an effort to pump up the stock price, dump it, insiders make millions, and leave all of us hanging. Just a couple reasons on why GGNC. 1) They have the best site and it is very user friendly. I have used it extensively and enjoyed gambling on the site. 2) If what James Chu says he is doing, is actually what he is doing, he will maintain the front runner position (nice sentence, huh?). He will continue to grab the majority of the market share with his aggressiveness. This can not be underestimated - Look at Steve Case of AOL. His innovation and aggressiveness has created on on the best stocks of the 90's. 3) I am willing to "risk" more now for much greater rewards later than wait for the all the remaining pieces to come in. Like I stated before, this stock has traded in excess of 8 million shares in a single day. A lot of people are waiting to jump in once they release their audited numbers. I will enjoy riding the wave up as they all try to buy shares on the small float. The small float is a great friend of ours. I've rattled on long enough. I just wanted to add my two cents. Just a reminder - this is only MY opinion. I just thought I would share it to my fellow long GGNCites. Very Long on GGNC and anxiously awaiting their reporting status. StockRanger