Renewable Energy and Power Inc (RBNW)

[Lord_of_Trades]

I think the answer to that is based solely on the amount of profitability and its relation to the current nature of the fixed costs on the balance sheet.

The tradings multiple on the profitability will depend on how the market determines the future potential of the company. In this area you get anything from a 1X multiplier to companies with non-sustainable profits to extreme overvaluations such as amazon where the company is trading at 500X its current profits (totally absurd by the way). Hence, the answer to that will depend heavily on how the market assesses the sustainability and growth of the profit that is achieved; as well as the amount.

If you take a look at the current trends, the company appears to be in a great place in this regard. The 27% increase in gross profit shows that they are reducing their variable costs at an extremely impressive rate as well, in addition to landing the larger MDI contract, which will have the favorable effect in relation to the fixed costs effect.

-Lord