China Armco Metals Inc. (CNAM)

[value1008]

Systrader, some while back Viking86 worked out some conservative numbers. As he wrote (i quote):

2010 Company guidance:
rev= 220M
net inc = 12M
FD= 16.97M shares [and he thought this high number of shares was "overkill"]
eps= 0.71 E
2010 my estimate:
rev= 100 + 46 + 100= 246M
[i.e., $100M from scrap recycle + $46M for excess production of scrap + $100M for older distrib business]
net inc= 17.68M
FD= 16.97M shares
eps= 1.04 E
2011 my estimate:
rev= 534M
net inc= 40.3M
FD= 17.87M shares
eps= 2.25 E
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I would supplement what Viking wrote several weeks ago by saying that, if we add the 500k shares from the new agreement (with Henan Chaoyang Steel Co., Ltd) onto that "overkill" f.d. number of shares for 2010, you'd get a 2010 EPS of 1.01, and a 2011 EPS of 2.19 using his rev/n.i. figures.

I'm NOT including here the stake that CNAM recently took in Apollo Minerals, estimated by mngment to be capable of bringing in $135M in revs/year (not sure when such revs would begin to kick in)...

All this, for a stock that's presently trading in the lower $3s! The market is ENTIRELY NEGLECTING CNAM’s future growth...

Here are excerpts from two recent press releases:

“Based on Apollo's estimated 800 million metric tons of iron ore reserves, the Mount Oscar Project could potentially provide China Armco with approximately 1 million metric tons of iron ore per year after refining which has the potential to generate revenue for China Armco in excess of U.S. $135 million annually at today's market prices. ‘We are excited to enter into this agreement to acquire a stake in Apollo, Australia is well known for its wealth of iron ore resources and we are confident that Apollo's tenement holdings will provide substantial rewards to us both in return on investment and in future revenue from iron ore distribution through the off-take rights.’" (Source: Marketwire, 2010-06-09)

“Management is maintaining financial guidance with revenues for the full year of 2010 exceeding $220 million with net income exceeding $12.0 million. Management expects its metal recycling operations to become the largest contributor to revenues progressively accelerating in the second half of 2010. ‘We anticipate that as our recycling ramps up throughout the year and our distribution business builds on the favorable trends from the first quarter of 2010, we expect to see record performance for our company in the coming years. We are in the strongest financial position in our history and intend to put our capital to work to further fuel our growth.’"
(Source: Marketwire, 2010-05-17)