Fuego Enterprises, Inc. (FUGI): Wiffenproof, an $11.13 per share FUGO an...

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stervc

Re: wiffenproof post# 1419

Tuesday, 01/08/2008 1:30:52 PM

Tuesday, January 08, 2008 1:30:52 PM

Wiffenproof, an $11.13 per share FUGO answer for you…

First, the Luny Tunes are just arriving as part of the FUGO TEAM so you will need to give them some time for their achievements to be reflected within the FUGO financials. You should see something soon enough if I had to guess so sit tight.

Below is an article that states that the Luny Tunes made Universal Records $40 Million alone last year just on reggaetón music. Please read as I will show how I view things and why following the article info:

http://thephoenix.com/article_ektid18336.aspx
…Four years later, they’ve helped make reggaetón a global success. “My boss made Universal Records $40 million last year on reggaetón only,” Saldana says — and a hefty chunk of that money was no doubt earned on songs that he produced with Cabrera. They are the genre’s biggest hitmakers by far. …

Let’s go one step further and say that the Luny Tunes hit a slump and only does half of that amount to equate to $20 Million for the year. Now, as you have seen from apparently you reading the FUGO financials, there isn’t much debt so let’s go with a 50% profit margin instead of the standard 25% profit margin for this FUGO consideration which I think is still very very fair to derive Income after consideration for Expenses being subtracted from the $20 Million as Revenues.

That would reflect…
$20,000,000 x .50 = $10,000,000 as Income

Income ÷ Outstanding Shares (OS) = Earnings Per Share (EPS)

$10,000,000 ÷ 34,959,562 Shares = EPS

0.286 = EPS

Let’s remain still conservative and go with a 12 conservative PE Ratio:

12 PE Ratio x .286 EPS = Current Potential Value of FUGO Share Price

$3.43 Per Share = Current Potential Value of FUGO Share Price

But wait… let’s take being conservative to another level since the CURRENT growth rate (PE Ratio) for which the Sector (Services Sector) that FUGO trades is 38.93 and the Industry (General Entertainment) that FUGO trades is 45 as confirmed below:
http://biz.yahoo.com/p/716conameu.html

This means that technically speaking, we can use as a growth multiple for FUGO to multiply with its EPS the 38.93 PE Ratio for its Sector and still be giving FUGO a conservative valuation. Now again, please re-consider below:

38.93 Sector PE Ratio x .286 EPS = Current Potential Value of FUGO Share Price

$11.13 Per Share = Current Potential Value of FUGO Share Price

Now keep in mind that this does not take under consideration any other previous deals arranged or any other future deals to be arranged by FUGO.

I hope this helps to better explain the vision I see for where FUGO should be at now and will be heading. Again, this is just conservatively speaking through my eyes.

v/r
Sterling

Sterling's Trading & Investing Strategies:
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