Price to Sale (P/S) and Price to Earning (P/E) Analysis
One metric to look at in penny stocks is price to sale ratio. The lower the number the better. A ratio below than 2 for penny stocks is a tremendous grab, but with a growth small cap company, a forward looking P/S can be as high as 10. Let's look at the price to sale ratio for ONCI followed by Price to earning or P/E.
P/S Analysis
Current Share Price: 0.0016
OS - 1.5 bill share reduction: 3 billions
Market value = 4.8 millions
AR + Revenue = 9.5 millions
Based on the above, the P/S is 4.8/9.5 = 0.5. This is a hyper undervalued share price by any measure you can think about. For a penny stock, even a price to sa;e ratio of 5 would be still fantastic. Let's use a conservative approach and assume a P/S of 3. At a P/S of 3, the share price should be at 0.0096.
Now some people is going to doubt and say you cheated. You reduced the OS by 1.5 bil before it happened, and you also included the AR. Well let's include them:
OS: 4.5 bil
Market Value = 7.2 millions
Revenue = 4.55 millions
P/S = 1.6
At a P/S of 3, the share price should be at 0.003.
Price to Earning
Using the most conservative assessment for a market value of 7.2 million dollars, without subtracting the 1.5 billion, The P/E is 4.5.
A growth company like ONCI can easily have P/E of 20 or higher, especially if you include the AR in the equation. Using a P/E of 20, the share price can be easily at 0.008 or higher.
Hope you get the point. No matter how you flip it and turn it, ONCI stands up to be a BIG WINNER. LOOKING FORWARD FOR THE PR ON MONDAY.
