Sigma Labs Inc (SASI)

[alanthill]

Questionable Margins.

I think the projected margin numbers being tossed around on the Board are wishful thinking in the extreme. Of 273 software firms surveyed net margins averaged 20.47% (see http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html) Operating and gross margins are of course higher but net margins (after tax) average just over 20%. If we are highly generous and assign an expected net margin of 30% to SGLB that means that to generate .016 cents per share in net margin ( 10 million net margin) they would have to have gross sales of better than $33,000,000. If you give a P/E ratio of 50 to those earnings you would realize about an .80 share price. I know others will differ but I don't see 33 million dollars in sales on the near term horizon.