Just a quick back of the envelope calculation on our current valuation.
Based on 2017 year-end financials, we showed total income of slightly over $1M.
Twelve months ending Dec 31, 2017 profits were:
Gross profits $362,351
Net profits $175,023
Current OS: 288,661,657
So if we compute Earnings Per Share (EPS) based on net income formula:
EPS = Net Profits / OS = $175,023 / 288,661,657 = $0.000606
So based on current share price, P/E = share price / EPS = $0.0116 / $0.000606 = 19
In general I would say it is very difficult to put a proper valuation on an OTC Pink penny stock. Most tickers on the OTC don’t even have revenue, let alone net profits! The strong fundamentals for JNSH puts the company in a pretty select few that one could even perform this calculation. For those penny stocks that do actually have revenue, the PPS is usually a very high multiple of earnings due to the highly speculative nature of the market.
For comparison, as of Friday, May 11, 2018:
S&P 500 P/E Ratio = 24.28
Nasdaq 100 P/E Ratio = 24.99
Russell 2000 (small-cap) P/E Ratio = 88.75
Let’s take a look at what the company valuation should be based on average industry P/Es of large successful S&P 500 companies and Small-Cap companies, and keep in mind this only takes into account 2017 Net Profits of $175,023.
P/E = 20, PPS = 0.012
P/E = 25, PPS = 0.015
P/E = 30, PPS = 0.018
P/E = 50, PPS = 0.03
P/E = 80, PPS = 0.048
Our little JNSH has a better price-earnings ratio than most stocks on the S&P 500 and other small-cap index companies. Clearly undervalued at the current PPS. The funny thing is that you can’t even look at fundamentals for most OTC stocks. Some have upwards of billions of shares, tons of convertible debt, no revenue, etc.
My personal opinion of where JNSH should be trading NOW, without any pump, without any MOMO, without any huge news of future contracts that could boost 2018 profits above $175k… is in the $0.02-0.03 range.
Now for the BONUS! None of the above takes into consideration that we have 141,176 BLNK shares. As of market close today, they are worth $1.13M. I’m not quite sure how to factor that into the company valuation yet. But, without even adding any multiple onto the intrinsic value of the shares, that is $0.004/per JNSH share. :)
