This one: NACT is worth looking at,
NASDAQ BB: NACT
Recent Price: $0.12
Market Cap: $2.66 million
Shares Outstanding: 22 million
Estimated Market Float: 3 million
Fiscal 01 Revenue: $30 million
Fiscal 01 EPS: $0.18
Forward PE: 0.63
Price/Sales: 0.09
Industry Sector: Technology
Sector PE: 23.25
Sector Price/Sales: 2.45
6 to 12-Month Target Price: $3 to $4
Website: www.genesis-systems.net
Investment Highlights - NACT
* Profitable company with strong recurring revenue stream
* Clear, focused business strategy for substantial growth
* Recession Proof market with significant consolidation and expansion
opportunities
* Repeated stock dividend distribution process
* Strong balance sheet
* Experienced management team with extensive industry knowledge
* International presence
Valuation Analysis
- We e need to look at their peers in the industry. Two public
companies listed on the NASDAQ BB are doing pretty much same as NACT is
doing. They are the Hartcourt Companies, Inc. (OTCBB: HRCT) and CBQ, Inc.
(OTCBB: CBQI). Both companies have about $15,5 million market cap while
they have about $7 million in annualized revenues with a loss from $3.25
million to $6 million. Even if NACT trades about their market cap, NACT
should be valued about $0.77 per share. If NACT trades about its peers’
valuation ratios, NACT should be valued about $3 per share.
- The earnings projections assume the successful execution of the Company's
strategic acquisition plan. With the currently planned acquisitions during
the fiscal year of 2001, the Company is estimated to achieve $30 million in
sales with net income of $4.4 million and earnings per share of $0.18 on the
basis of 25 million outstanding shares. If the stock trades about 15 to 25x
earnings, we will give a stock price from $2.70 to $4.50 per share. If the
company values about 3 to 4x sales, we will give the stock price from $3.60
to $4.80 per share. If we consider its growth factor, the stock could be
valued at a higher price. The Company's acquisition/spin-off schedule in
2002 should add a considerable number of technology companies. This will
bring the projected revenue of the Company by fiscal 2002 to $50 million.
Investment Conclusion
We believe NACT is well positioned to take advantage of the changes in the
technology industry. We believe these changes are still in their earliest
stages, affecting primarily the small technology companies to date. In other
words, we believe NACT is situated nicely to ride the wave of change we see
pouring over the relatively inefficient and traditional technology industry.
We don't see much downside for the stock that is traded around $0.12. We
believe the stock is an outstanding investment opportunity and is at an
excellent buying price considering its short and long-term potential. The
stock has been traded actively in the past several days and it appears that
the stock has technical breakout around $0.25. The stock should move up to
$0.50 for another consolidation when the stock breaks out with the next leg
up. Our 6-12 month target price is $3-$4 with a rating of "Strong
Buy".
AI
