Ever heard of the show Shark Tank?
I have been tracking this company (VPOR) for a while now, and am not in this for a quick flip. While it's a penny stock, The Vapor Group is a real company and I look at it as more of a venture capital investment at this point. They just added a profitable arm to their company that will increase total revenue by 20-30%. Need to think about this company in terms of if you were going to buy them out. Pretend you're a big tobacco company. The dilution will be over soon, and it is important to understand what the company is actually worth.
Revenue is increasing by roughly 20% per quarter, and costs are stabilizing, indicating the fact that profitability is within reach. Profitability indicates sustainability, and the CEO indicated for the time being that outside financing is no longer necessary.
Assuming they stay on the same revenue growth trajectory (which is conservative, given the explosive industry they operate within), I expect Q4 revenues to be 1.57 million dollars. It will be a coin toss as to whether they are in the black, but that is normal with a start-up venture. With a figure like this, I project total revenue in 2015 to be 10.1 million dollars with profitability at the bottom line.
Using a 12% discount rate, DCF Analysis suggests that this company is worth (10.1M / .12 ) = $84.2M. After conversion of notes ends, I expect the market cap to adjust towards this figure.
Catalysts and 2015 Outlook
PPS should begin to ascend toward fair value without news once the artificial selling subsides and short covering begins.
Expecting about 2.8B shares once complete, which supports a price at .03 minimum with current audited financial information.
Likely to see 1-2 development PRs in March.
Expecting annual report by March 31. End month at .007 James Bond Style.
Expecting debt clearance by second week of April. End month around .025.
Expecting Q1 fins with additional revenue stream (VGR Media) included by May 15. End month at .035.
If all signs point to growth, it's going to be a beautiful year with shares around .05 without buyback. Most of the heavy lifting has to be done by end of May as OTC volume dies after that.
Best current valuation of shares: .044.
Good luck!
