PipBoy, with your EXTO Valuation...
I think the news here with EXTO is great. The new management is doing a great job. I did speak to the old Officers and Directors a long time ago, but I have not spoken to any of the new Officers and Directors. Everything to include their business plan and direction has changed. I think I will leave well enough alone and continue not speaking to them (LOL)! From what I have heard from another shareholder that has spoken to the company, EXTO are preparing some filings of their financials to have confirmed to the public their Revenues amount recently PR-ed. As with many other companies, I don’t expect for this to be a short process.
It’s very obvious and very apparent that the company has not been diluting which is always a good thing. The company has an ungagged Transfer Agent (TA) and the share structure has not changed since its recent retiring of 1.2 billion shares a few weeks back. At some point in time, I expect for an increase of the 20 million shares mentioned in the PR relating to the acquisition, but the share structure is still as below as of today…
Outstanding Shares (OS) = 540,921,049 shares
Restricted Shares = 61,921,049 shares
Float = 479,000,000 shares
Authorized Shares 3,000,000,000 shares
I think the earnings number is closer to .01+ per share and not .11 per share as you had posted. By all means, I am far from being an expert, but these thoughts are only my opinions as I will explain. I think it is very good with the announcement of Revenues being over $15 million that have been generated for the first quarter of 2011. I know it's not a guarantee for future quarters, but if they could generate $15 million consistently for the next 3 quarters, that would equate to $60 million ($15 mill x 4 qtrs) in Revenues for the year.
With generating $60 million in Revenues for the year, we need to know what the profit margin from the Revenues generated is. When the profit margin is not given, I then like to presume considering a 25% profit margin for being conservative, but I will take it one step further and consider a 10% profit margin. That would equate to below for profit/earnings…
$60,000,000 x .10 = $6,000,000 Earnings
$6,000,000 ÷ 540,921,049 (OS) = .011 Earnings Per Share (EPS)
Consider now a 12 conservative P/E Ratio as the multiple to use with the .011 EPS to determine where EXTO could very well be justified to fundamentally trade…
12 P/E Ratio x .011 EPS = .132 fundamental share price
I think some of the current price swings are from nothing more than some investors that bought shares back when it was trading in the .000s range. I think they are selling through DOMS and again, it is nothing more than retail selling. If we did not have an ungagged TA, then I would definitely have to wonder.
A little more churning and I think EXTO will start its move northward to eventually trade in the pennies in my opinion. I have been in a few stocks where after the churning from some retailing selling to take profits were done, the price had moved substantially. I think patience will prevail here with EXTO.
v/r
Sterling
