Friday, April 12, 2013 7:38:10 PM
(EDITED from $9.55 to $5.42 with logical deductions)
Within this post, I am first logically going to show how SKTO could very well be worth trading in the area of $2.46 per share from the first valuation that you will see, but then I will show justification as to why it could very likely be valued to be trading well over $5.42 per share depending on the details released from previous news. Please, with this comparison, I am not saying anything bad about MJNA. I am just saying that I believe that SKTO is better, especially considering their most recent confirmation of SKTO paying their $274,861 in back franchise taxes to the State of Delaware. We’ll talk more about that later too, but for now, let’s justify these valuations that I mentioned for SKTO. Bottom line, if we get the financials that are expected per the company releases, then the following is what I expect to see in due time.
MJNA recently released news indicating that they have increased earned Net Income of approximately $5.52 million on Gross Revenues of $8.45 million for the quarter ended March 31, 2013 (this is a 65.3% Net Profit Margin):
http://ih.advfn.com/p.php?pid=nmona&article=57121157
Compared to SKTO, SKTO previously released that it is expected to generate in Gross Revenues from its licensing and service agreements, over $42.5 million. If you consider the same Net Profit Margin as MJNA’s, SKTO would have Net Income of over $27,752,500 for the ”year” as confirmed from the PRs released below:
The above ”new” $30 million plus the ”previous” $12.5 million equates to $42.5 million for an annual total.
As explained above from MJNA, with a 65.3% Net Profit Margin, this yields the amount below for Net Income for the purpose of how I am explaining such within this post:
$42,500,000 x 65.3% Net Profit Margin = $27,752,500 Net Income for SKTO
There is more to the revenues piece that I will explain later within this post, but I will stick to the thoughts explained above for now. This is the growth that was explained to Kevin Allyn and his TEAM that motivated them to be involved. People with money, understands what it takes to make money. Now I truly see the vision of Kevin and his TEAM.
To further compare…
MJNA Outstanding Shares (OS) = 808,238,318 shares
SKTO Outstanding Shares (OS) = 362,050,303 shares
Something else very important to note which confirms to me that dilution is not part of their plans for growth, read the posts below courtesy of stockfinder2012 which confirms that the new management paid $274,861 in back franchise taxes to the State of Delaware on Apr 11, 2013 to renew the corporation, SK3 Group, Inc. (SKTO) all while still keeping the Authorized Shares (AS) the same at 500,000,000 for common and the AS for the Preferred Shares remaining the same at 5,000,000:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86746022
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86746628
The company has recently provided an update to OTC Markets which reflected that their OS was still unchanged for some years ago. This is why I believe that the SKTO OS is still 362,050,303 shares as of today since we now know that there has not been any dilution to the ”overall” OS since early 2011. This could be further understood below:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86277238
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86259258
Please understand, this “compare & contrast” analysis is no knock against MJNA as I believe that MJNA is a very real stock, but I also believe that SKTO is a very real stock and that MJNA is about the only thing existing right now to ”logically” compare SKTO with based on logical deduction. These Marijuana stocks, SKTO & MJNA, would both probably trade within the Healthcare Sector within the Industry of either ”Drugs – Generic” or ”Drug Manufacturers – Other” with a P/E Ratio of 44.60 or 32.10 respectively. I’ll remain conservative and use the 32.10 P/E Ratio since it’s the smaller of the two:
http://biz.yahoo.com/p/5conameu.html
Before we derive the Earnings Per Share (EPS) and the share of which where SKTO should fundamentally trade, read the link below to understand the importance of the Price to Earnings (P/E) Ratio:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57154170
…if MJNA has… an OS of 808,238,318 shares, $8.45 million in Revenues and $5.52 million in Net Income for the Quarter Ended March 31, 2013 and trades in the area of .25+ per share…
…then…
$5,520,000 ÷ 808,238,318 shares = .0068 Quarterly EPS for MJNA
.0068 x 4 Qtrs = .0272 Annual EPS for MJNA
.0272 Annual EPS x 32.10 P/E Ratio = $.873 per share valuation for MJNA
As for SKTO (Medical Greens™)…
…if SKTO has… an OS of 362,050,303 shares, $42,500,000 in ”Annual” Revenues and $27,752,500 in ”Annual” Net Income for the year and trades in the .04+ per share range…
…then…
$27,752,500 ÷ 362,050,303 shares = .0766 Annual EPS for SKTO
.0766 x 32.10 P/E Ratio = $2.46 per share valuation for SKTO
This is why Kevin Allyn and his TEAM are here. This is what they see and the business objectives they are executing for growth. In my opinion, you can’t help but to wonder where SKTO should be fairly trading once they release their financials to confirm such. The above is a Fundamental Valuation for SKTO to explain why I can clearly see SKTO trading in the dollars as this TEAM continues to execute their business objectives.
A breakdown of how one of the ways the revenues for SKTO can be generated was eloquently explained below courtesy of snakefart who posts here within IHub:
After reading the breakdown above, now consider what the earlier released news means indicating that SKTO (Medical Greens™) has recently contracted over a dozen healthcare facilities and providers in Southern California to become their Medical Cannabis Administrator (MCA):
http://ih.advfn.com/p.php?pid=nmona&article=57029409
Keep in mind, this was announced after the company confirmed to have over $42.5 million in ”annual” contracts for the first quarter of 2013 alone. This means that the contracts that are to be expected from these over a dozen healthcare facilities and providers in Southern California are in addition to where the $42.5 million have come from. Below is a calculation of what to expect as a minimum from the over a dozen healthcare facilities and providers in Southern California considering a very conservative amount of $4.3 million per year per facility:
$4,300,000 x 12 Healthcare Facilities/Providers= $51,600,000
So, this potential $51,600,000 would be in addition to the $42,500,000 ”per year” amount. This is a total of very possibly $94,100,000 in Annual SKTO Revenues.
This would more than double the $2.46 valuation originally discussed to make SKTO to be ”potentially” worth as indicated below:
$94,100,000 x 65.3% Net Profit Margin = $61,447,300 Net Income for SKTO
$61,447,300 ÷ 362,050,303 shares = .169 Annual EPS for SKTO
.169 x 32.10 P/E Ratio = $5.42 per share valuation for SKTO
The key thing to understand about these valuations is that the Revenues/Income is probably building up to such amounts mentioned by the company to where all of such has not been captured to be listed as the total amounts thus far. This means that there is a growth process that is involved. As more is released to confirm each level of growth, I suspect the price of SKTO to graduate to the next level of growth accordingly. The key thing to note is that the company has these licensing and service agreements secured. This is what’s like money in the bank.
But wait… where are all of these authorized legal marijuana dispensaries going to come from of which have already been the initial market for SKTO (Medical Greens™) and will be some of its future market? Courtesy of hotstock27, see below the locations for all of the authorized legal marijuana dispensaries in California:
https://legalmarijuanadispensary.com/
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86238716
Courtesy of Traderboy1966 is a list of dispensaries within California by name and location:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86238716
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86257496
Courtesy of Alias88 & nowy257, further proof of the Delaware SOS being updated to place SKTO in Good Standing and confirmation that the Authorized Shares (AS) is still unchanged is further explained within the posts below:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86733404
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86739676
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86277238
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86259258
Now read the posts below about the management TEAM for SKTO and see why I have no problems in trusting these gentlemen with my investment here with SKTO:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86645037
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86646734
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86263208
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86259344
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86692312
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86640765
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86618868
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86613176
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86546501
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86744137
Key Articles of Industry Growth & Legalization:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86744548
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86744277
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86729194
http://m.lvsun.com/news/2013/apr/11/senate-committee-passes-bill-setting-marijuana-dis/
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86647475
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86544086
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86538552
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86538530
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86248768
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86060950
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86073617
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86193580
This $5.42 valuation is something to be possibly achieved over time if they continue to execute their business objectives. From the looks of things, the company has plans to not be content with the current growth that we are aware of for now. It is looking like they are considering to expand to levels of significant proportion. The news just released states…
Because of this news, I would expect for another huge piece of valuation, of which is unknown to us for now, to be added to the valuation that is already known. This is huge news.
v/r
Sterling
Sterling's Trading & Investing Strategies:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=39092516
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