FUTURE VALUATTION OF SSPC AFTER THE PLANT IS OPENED AND INTO PRODUCATION
Found this on RB. Can I have a password now?
Any comments?
As I promised, here is the information I want to share with SSPC stockholders and potential SSPC buyers, shorts/bashers don't read, it is not for you.
Since most(if not all) of the alternative energy companies are not generating profits, as we have done for these Internet companies, the only common measure of the stock valuation is through Sales/Price ratio instead of P/E ratio. In fact, SSPC might be one of the first companies will generate profit when the plant opened (because of high profit margin and government subsidize the cost of purchasing of soybeans, Mark Taylor already indicated the company will be profitable for the next quarter when the plant opens).
Here are 13 Alternaitve Energy Stocks:
COMPARISIONS:
TICKER P/S PRICE MKT CAP SALES
HPOW 151 $13 $702M 3.92M
FCEL 48 $73 $1.2B 24M
BLDP 78 $55 $4.86B 61M
DCH 68 $2.25 $63 M 840K
PLUG 223 $33 $1.46B 6.47M
EFCX 16 $3.3 $88 M 4.13M
VLNC 42 $7.6 $311M 6.68M
CPST 77 $34 $2.6B 28M
HYGS 19 $5.6 $198M 7.89M
MCEL 243 $12 $316M 0
PRTN 243 $12 $413M 883K
MKTY 62 $10 $360M 5.75M
EVRC 50 $5.4 $56M 795K
ESLR 30 $6 $141 $2.1M
Numbers are straightly from yahoo finance, annual sales revenue are projected by Yahoo based on first quarter revenues. MCEL has no revenues, it is reasonable to assign the top number of the P/S ratio 243 to MCEL.
Of these 13 alternative energy companies:
* AVAERGE P/S RATIO: 81
* AVERAGE STOCK PRICE: $20.47
* AVERAGE MARKET CAP: $971 million
SSPC SALES PROJECTION:
Based on production capacity of 10 million gallons for the first plant, assume the average price of the biodiesel is $2/per gallon, the total revenue projected from the plant is estimated to be $20 millions. This is a very conservation estimation of the potential revenue for the whole company, because (a) diesel price is likely to increase; (b) the company expects to open more plants this year; (c) the company is not just selling biodiesel, the company is also conducting valued-added service such as Power Generation/sales of power generators etc, (d) lycerin is a by-product of the manfacturing process, it sells at the triple price of biodiesel, the revenue is not counted here; (e) The company is already providing about 1.2 million gallon biodiesel to public school buses in Arizona, the revenue is not counted here.
Clearly, this projection is purely based on the valuation of the first plant.
Let's based on O/S of 42 million shares, current price of 0.43, and projected revenue of $20 million, the current numbers for SSPC are:
Sales/Price Ratio: 0.85
Current price: $0.43
market Cap: $17M
There are several ways to calcuate the fair market value of the stock in a year based on the first plant:
(1) Most Conservative Estimation:
If we use the low end of the P/S ratio in the whole group, assuming we raise the P/S ratio to 16 (EFCX):
1 year target price for SSPC would be: $8.09
and the market cap is $339 million.
Remember, this is the most conservative estimation based on the lowest P/S ratio of EFCX.
(2) Medium and Avarge Estimation:
If we raise P/S Ratio of SSPC from 0.85 to sector average of P/S ratio of 81:
1 year target price for SSPC would be: $40.97
and the market cap is $1.72B
This is the moderate estimation, based on the sector's average P/S ratio of 81.
(3) Top Estimation:
If we raise the P/S ratio of SSPC from 0.85 to the second highest of the sector: 243 (PRTN)
1 year target price is: $122
and the market cap is: $5.1B
Clearly, PRTN is one of the most overvalued stock in the whole alternative energy sector. With enough hype of bio-diesel by the media and the Street, who knows, maybe this price could be achieved like PRTN.
(4) Equal Estimation:
FCEL is about the same size (sales projection wise with $24 million sales) as SSPC, raise the P/S ratio of SSPC to FCEL:
The target price for SSPC would be: $24.28.
CONCLUSION: I would conclude the current stock price is very undervalued, an increase in the stock price of 2,000% from the current level can only bring it in par with the lowest P/S ratio in the alternative energy sector. As far as these speculations of the first plant is already factored in the stock price, you do the math and calculate it again.
I open to any suggestions or doubts. This is just my ownopinion, please don't based on my research to buy or sell stocks. However, I would recommend my friends read this board add to you SSPC holdings until the last penny is spent.
Good luck!
FUTURE VALUATTION OF SSPC AFTER THE PLANT IS OPENED AND INTO PRODUCATION
As I promised, here is the information I want to share with SSPC stockholders and potential SSPC buyers, shorts/bashers don't read, it is not for you.
Since most(if not all) of the alternative energy companies are not generating profits, as we have done for these Internet companies, the only common measure of the stock valuation is through Sales/Price ratio instead of P/E ratio. In fact, SSPC might be one of the first companies will generate profit when the plant opened (because of high profit margin and government subsidize the cost of purchasing of soybeans, Mark Taylor already indicated the company will be profitable for the next quarter when the plant opens).
Here are 13 Alternaitve Energy Stocks:
COMPARISIONS:
TICKER P/S PRICE MKT CAP SALES
HPOW 151 $13 $702M 3.92M
FCEL 48 $73 $1.2B 24M
BLDP 78 $55 $4.86B 61M
DCH 68 $2.25 $63 M 840K
PLUG 223 $33 $1.46B 6.47M
EFCX 16 $3.3 $88 M 4.13M
VLNC 42 $7.6 $311M 6.68M
CPST 77 $34 $2.6B 28M
HYGS 19 $5.6 $198M 7.89M
MCEL 243 $12 $316M 0
PRTN 243 $12 $413M 883K
MKTY 62 $10 $360M 5.75M
EVRC 50 $5.4 $56M 795K
ESLR 30 $6 $141 $2.1M
Numbers are straightly from yahoo finance, annual sales revenue are projected by Yahoo based on first quarter revenues. MCEL has no revenues, it is reasonable to assign the top number of the P/S ratio 243 to MCEL.
Of these 13 alternative energy companies:
* AVAERGE P/S RATIO: 81
* AVERAGE STOCK PRICE: $20.47
* AVERAGE MARKET CAP: $971 million
SSPC SALES PROJECTION:
Based on production capacity of 10 million gallons for the first plant, assume the average price of the biodiesel is $2/per gallon, the total revenue projected from the plant is estimated to be $20 millions. This is a very conservation estimation of the potential revenue for the whole company, because (a) diesel price is likely to increase; (b) the company expects to open more plants this year; (c) the company is not just selling biodiesel, the company is also conducting valued-added service such as Power Generation/sales of power generators etc, (d) lycerin is a by-product of the manfacturing process, it sells at the triple price of biodiesel, the revenue is not counted here; (e) The company is already providing about 1.2 million gallon biodiesel to public school buses in Arizona, the revenue is not counted here.
Clearly, this projection is purely based on the valuation of the first plant.
Let's based on O/S of 42 million shares, current price of 0.43, and projected revenue of $20 million, the current numbers for SSPC are:
Sales/Price Ratio: 0.85
Current price: $0.43
market Cap: $17M
There are several ways to calcuate the fair market value of the stock in a year based on the first plant:
(1) Most Conservative Estimation:
If we use the low end of the P/S ratio in the whole group, assuming we raise the P/S ratio to 16 (EFCX):
1 year target price for SSPC would be: $8.09
and the market cap is $339 million.
Remember, this is the most conservative estimation based on the lowest P/S ratio of EFCX.
(2) Medium and Avarge Estimation:
If we raise P/S Ratio of SSPC from 0.85 to sector average of P/S ratio of 81:
1 year target price for SSPC would be: $40.97
and the market cap is $1.72B
This is the moderate estimation, based on the sector's average P/S ratio of 81.
(3) Top Estimation:
If we raise the P/S ratio of SSPC from 0.85 to the second highest of the sector: 243 (PRTN)
1 year target price is: $122
and the market cap is: $5.1B
Clearly, PRTN is one of the most overvalued stock in the whole alternative energy sector. With enough hype of bio-diesel by the media and the Street, who knows, maybe this price could be achieved like PRTN.
(4) Equal Estimation:
FCEL is about the same size (sales projection wise with $24 million sales) as SSPC, raise the P/S ratio of SSPC to FCEL:
The target price for SSPC would be: $24.28.
CONCLUSION: I would conclude the current stock price is very undervalued, an increase in the stock price of 2,000% from the current level can only bring it in par with the lowest P/S ratio in the alternative energy sector. As far as these speculations of the first plant is already factored in the stock price, you do the math and calculate it again.
I open to any suggestions or doubts. This is just my ownopinion, please don't based on my research to buy or sell stocks. However, I would recommend my friends read this board add to you SSPC holdings until the last penny is spent.
Good luck!
