Ok, I have a few minutes of downtime, and decided to share this with the group. This is edited from my private chat session with another member of ihub who isn't sold on the investment. (Numbers were based on a current price of .015)
Here's all I will say.....
Go back 4 weeks ago; share structure is basically 1.5 billion. You invested somewhere in the .0020 range I'm guessing? At that point the market value is 3,000,000.
Sales in q1 is roughly 100k, q2 is 160k, with new products, lets just say q3 is 220k, and q4 is 320k. I think this is very conservative. Total sales are 800k for 2011. At 3 mil mkt cap (.002), the sales to cap ratio is 3.75. In a decent economy, retail businesses typically sale for 6-8 times sales ratio.
Also, the company has 1.1 million in debt, but 1.9 million in receivables and inventory, plus land and buildings, free and clear should they go with any sale. That swings assets over liabilities by about 1 mil, my estimate, and furthermore the company is profitable, so there are no go forward losses to deal with in a current sale.
Ok, point here is that I think this company is worth 6-8 times sales currently, so going forward, let's use 7 times for my illustration. Using this, the company is worth 5.6 million if sold (7 x 800k).
This gives the company a fair value of .0037 currently, or 5.6 million/1.5 bil shares. This of course is my math, and my opinion.
This doesn't take into account any of the ihub bs, hearsay crap, photos, anything, but straight numbers off the balance sheet and p&l.
Ok, let’s assume a 50% sales increase for the next several years. We end 2015 with roughly 4.1 million in sales. This isn’t too much of a stretch when you consider year one is just an increase of 400k, or 20 tractors, (avg 20k each) and no implement sales. That’s 7 tractors on average in each of the 3 company planned dealerships a year, year one.
Now move forward 3 years with the current dreaded dilution! Now we have 6,5 bil shares, with sales of 4.1 mil, and a mkt cap/sales ratio of 3.17, which is less than the current 3.75 ratio. At 7 times sales, the sales value is 28.7 mil, which gives a fair value of the shares, with 6.5 bil outstanding of .0044, again, better than current pps. This would be a 193% sales gain over 3 years, not bad?
Now after muddling through the math, I'm left with this. Is there enough here to warrant a 50% sales increase year over year?
I personally think there is, with nothing else happening.....no Australia, no China, nothing but TYTN and there 3 or so dealerships. This 50% sales gain could result in me getting a 193% return, I'm in!
If you double sales growth, which is still not alot with their current sales base, the ratio is 1.02, with a fair pps of .014. This is an 833% pps gain, with a doubling of sales and nothing more, other than the extra 5 bil shares bringing the total to 6.5 bil shares.
If you do 1.5x sales growth, which is more than doable, the ratio is .42, with a fair pps of .034. This is a 2167% pps gain over a 3 year holding. So even with 6.5 billion shares, the price could fairly be worth .034 per share in 3 years. I will take that all day long.
That's why I'm in, I invested in the tractor business, young, growing, with a chance to be an alternative offering for farmers. .005 to .03 in 1-3 years is a great mid-long term investment.
Now, the icing;
Could the deal with the Australian company result in increased sales if it comes to fruition?
Could the finance division come to fruition and result in extra income?
Could the dealerships build to 100-150 over the next three years? BTW, at just 1 tractor every other month (6 per dealerships per year x 20k avg x 150) is 18 million. The 1.5 sales ratio above is only 32 million, which kinda puts my numbers into perspective.
Lastly, is there any chance at all, the Chinese could want to R/M into TYTN to gain access into the American exchanges and use TYTN to grow the biz here stateside....don't count it out.
To close, I will say this. I'm not the best spoken, most affluent business man you will ever meet. Many meet me and hear my accent, my silly ass jokes, and go yeah, ok. When looking at Mark, don't necessarily judge the book by it's cover....businessmen come in all different types, and the biggest frauds in the world have always been the smooth talkers, slick looking ones who could croon the world....that ain’t Mark, IMO
Now that I’ve shared this with the ihub’ers worldwide, lol, have at it…..just remember guys, this is just my way of explaining to a friend why I chose to invest in this company…it’s just my rationale. You each have your own….invest accordingly!
just sayin!
