ScripsAmerica Inc. (SCRCQ)

[coolerheadsprevail]

All in all, this is a very good post, Peach. One of the better ones I have seen here in a very long time. Maturely conveys the investment growth potential while acknowledging the high degree of inherent risk. These are the types of touts that won’t turn off newbies coming to check out SCRC.

I believe my expectations on the future pps of SCRC will be accurate.

Question for you: Are you using the basic O/S count or the fully-diluted O/S count?

I do not believe that your .06-.10 EPS target range for 2015 is crazy. In fact, I had posted previously that “if” SCRC maintained the same expense ratios as it reported in Q3’14, then this means that we can reasonably project what a full year’s net earnings should be based solely on reported Main Ave numbers.

For example, for Q3’14, we saw that SCRC reported net Main Ave revenues of $12.57M and net earnings of approx $1.5M. So this translates to earnings at the rate of 11.9% of Main Ave reported revenues.

So what this means is that if Main Ave runs at $64M in revenues annually (using OCT’14 thru DEC’14 approved orders and then multiplying this quarterly number by 4), 11.9% of this translates to approx $7.6M in annual net earnings for 2015.

Using 138M O/S count gets us EPS of 5.5 cents. But using the fully-diluted share count of approx 168M gets us EPS of 4.5 cents.

This is not too far off from your low end range of 6 cents. In fact, depending on whether you use the O/S or fully diluted share count, SCRC only needs an incremental increase in net earnings of $1.38M - $1.68M to increase EPS by a penny. In essence, every $1.38M-$1.68M in earnings moves the EPS up a whole penny.

NOW, here is the good news: As I stated previously, my estimate was based on SCRC maintaining the status quo, so there is no reason that SCRC should NOT be able to hit this low end of your range.

Certainly new revenue streams that prove to be material will move earnings (and EPS) further up along your range. But considering how WRx and PIMD have yet to gain traction, and RapiMed has still yet to launch, and this new diabetic equipment segment is still a big unknown, it is too early to handicap how much any non-Main Ave revenue streams will really contribute to earnings.

That being said, IMO, the two biggest factors for shareholders are:

(1)
Whether SCRC can get Selling Expenses down. Remember, the jump from 45% to 65% represents 20% of GROSS TOPLINE REVENUES getting flushed down the toilet. At a $64M annual run rate, this translates to $12.8M that should otherwise have gone directly to net earnings – and therefore, to us shareholders… …and if you don’t think this is important, consider the fact that an additional $12.8M in net earnings by itself computes to 9.3 cents EPS (7.6 cents EPS fully-diluted)… …which means that had SCRC maintained its 45% selling expense rate as it did in Q2’14, an annual $64M run rate would translate to a whopping 14.8 cents EPS (12.1 cents EPS fully-diluted).

So if SCRC can lower its average annual selling expenses by even a measly 5%, this translates to an additional $3.2M in net earnings – which would add 2.3 cents to the EPS (1.9 cents fully-diluted)… …and we are well on our way past the 6 cents EPS that was your low end of the range.

(2)
How much of a multiple the Street will be willing to award SCRC’s sp. Any combination of either continued growth in Main Ave or meaningful new revenue streams (diabetes equip segment, PIMD, RapiMed, UA/JJ’s, whatever) will demonstrate growth – and GROWTH is what will make the Street willing to award SCRC with a healthy multiple.

And when it comes to multiples, this makes decreasing Selling Expenses that much more URGENT for shareholders because every $1M that can be saved and re-routed back down to net earnings ends up being worth up to $10M-$15M if the Street ends up valuing the sp at a 10x-15x multiple. IMO, 10x-15x an EPS of 6 cents may be a nice 60-90 cents, but if we can bring selling expenses down to the point where EPS is 10 cents, then 10x-15x 10 cents is now $1.00-$1.50. So this seemingly small increment of 4 cents EPS is actually worth 40-60 cents to our sp.

I am not saying that the pps will go to the moon.I am saying that major news along with positive monthly numbers each month could elevate SCRC straight to a dollar by the end of 2015.

Depends which moon you are talking about. If Jupiter’s moon, then that is way overboard, LOL…

IT'S ALL RISK REWARD...I expect a 5 to ten bagger on any penny stock I buy.The risk in all pennies is extremely high.

Very well stated. This is in stark contrast to the endless touts and claims of “slam dunk” that was repeatedly used to lure unsuspecting sheeple by JOSEPH ZAMPETTI and his core of criminal non-disclosing promoters as they were on the prowl for bid support and bagholders to buy the 28M shares of 0.00 and 0.05 PIPE stock that they have been dumping for well over a year now…