Even if you don’t subscribe to the $6.50 share price as being a reasonable target in the average holding period for most investors; this is going to be a massive winner for you and everyone else who gets in now. Next earnings release could easily push this above .15 given the ask was .098 just yesterday, Get a surge in volume and people could be left chasing all the way up to .35 which I think is the lower end of fair value. Anything up to .55 would be a reasonable valuation given current information. Beyond that we need continued positive results with organic revenue growth from all current segments.
There are two additional contributors that could push the stock into NASDAQ uplisting discussions. First, additional acquisitions that don’t drag the company, once profitable, into the red for more than 3 quarters. It has been shown the company can make solid acquisitions but also have shown they don’t hit on every one which can be costly if we think the stock can continue to march upward. One bad deal could drag the share price down for several quarters and eat up much of the cash flow we are looking forward to hearing about soon. Second, SpectrumEBOS internal testing should be continuing with hopefully some news later in 2019 or early 2020. This product could be worth 10x more than the rest of the operations if it is mildly successful commercially. At which point they could consider a spin-off or sale since it doesn’t really fit into a manufacturing optimization business model. I could see a valuation of anywhere from 20m - 100m once they near an installed base of 50 clients (could be more needed as “proof-of-concept” if the clients end up being very small and simplistic operating models).
I think $6.50 is possible. I might even go higher but it will take time and continued execution. I am happy buying at these levels or really anywhere up to .15 prior to quarterly results. After that I think investors will be left chasing so get a full position now.
