Key to add to this STHC Fundamental Valuation... Respectfully, these thoughts are how I see things. I think first it is important to understand that the
Outstanding Shares (OS) is the
fundamental denominator that's used to assess the
fundamental valuation of a stock and not the
Authorized Shares (AS). I'm thinking though that you used
370,000,000 shares as the
denominator in your valuation formula/example as the rounded up number of the
OS of
369,462,271 shares even though you called it the
Authorized. The confirmation of the
OS is below within OTC Markets:
https://www.otcmarkets.com/stock/STHC/security For inquiring minds, the
$19 Million in
Earnings (EBITDA) was derived from the company's website as indicated within the post below:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=157402706 So...
$19,000,000 ÷ 369,462,271 shares (OS) =
.0514 So, I do see where you have derived the value of
.05+ per share. However, the problem with that is that the
.05+ per share value is basically an
Earnings Per Share (EPS) amount. This means that you need to multiply this
EPS by the
Price to Earnings (P/E) Ratio for the
Industry of which it would exist to trade. The
PE Ratio is basically the
growth rate for a stock for its
Industry in which it exists.
Let’s take into consideration the
Price to Earnings (P/E) Ratio of
36.92 that's indicated within the link below for the
Metals & Mining Industry of which clearly this is what fits for
STHC:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html This means that to derive a fundamental valuation for which
STHC should trade within the
Metals & Mining Industry, we would need to multiply its
EPS by the
Price to Earnings (P/E) Ratio for the
Metals & Mining Industry to get below:
.0514 EPS x 36.92 PE Ratio =
$1.89 per share valuation for STHC Some might want to go a little conservative to air on the side of caution and consider
15 for a
conservative PE Ratio then observe below:
.0514 EPS x 15 Conservative PE Ratio =
.771 per share valuation for STHC With the logic that you posted, you are basically using a
PE Ratio of
1 to get your value of
.05+ per share of which assumes that there is absolutely no growth within the
Metals & Mining Industry which is absolutely not the case. The
36.92 number that is used for the
PE Ratio was created from
92 companies that are
"profitable" companies within the
Metals & Mining Industry as provided within the link above. So, it's actually fair to use
36.92 for the
PE Ratio as there is evident growth since so many companies within the
Industry are profitable.
This means that STHC should grow at a rate that is the norm for the stocks within its Industry of which it exists based on the positive factors for growth that currently exists. For those new for understanding what a
P/E Ratio is and key dynamics as it is referred to being the
growth rate for a stock as it exists within its particular
Industry, read the links below that hopefully will help one to see how it's used to assess the fundamental valuation of a stock:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57154170 http://www.investopedia.com/terms/p/price-earningsratio.asp To further articulate what I explained above, look at many of the major market stocks such as
MSFT,
CSCO,
QCOM,
AAPL, etc. Look at their Earnings Announcements and see how low their
EPS is compared to the
dollars per share price that those stocks are trading. They trade much higher than their
EPS because the market takes into consideration their
growth rate for their
Industry or their
PE Ratio for which they exist. Hopefully this helps more investors to see how such works.
v/r
Sterling