SwingTrade Member Forum

[MikeDDKing]

PWEB 08/03/09 update...

PWEB is a stock that IMO has excellent opportunities to be a multi-bagger from the present price of $0.33. PWEB provides web software tools, electronic business storefront hosting and internet payment systems for small to mid-sized businesses in the US. Here are some reasons why I think they will be a multi-bagger:

1. In Q1 they earned $0.007/share on revenue of $3.2M.

2. For Q2 they have guided for revenue of at least $6.4M. Because they have high margins incremental revenue should drop rapidly to the bottom line. I think that the increased revenue will translate into Q2 EPS of roughly $0.027 and possibly more. http://finance.yahoo.com/news/Pacific-WebWorks-Continues-bw-1503491235.html?x=0&.v=1

3. They have guided for 2009 revenue of $23-$24M. That implies $13.4M to $14.4M in revenue for Q3 and Q4 or an average of $6.7-7.2M per quarter. That means that Q2 revenue and earnings look sustainable and we can expect some incremental growth in the remainder of the year. Also, they have increased annual guidance before so further revenue increases seem like a reasonable possibility. http://finance.yahoo.com/news/Pacific-WebWorks-Upgrades-bw-3662581733.html?x=0&.v=1

4. They have improved their infrastructure and can grow with little incremental costs. They stated the following in a recent press release: "We are now in a position to double or triple our customer base with limited costs going forward." http://finance.yahoo.com/news/Pacific-WebWorks-Builds-bw-715214105.html?x=0&.v=2

5. They are expanding their business model to add internet marketing services. This should help to grow their revenue and earnings. http://finance.yahoo.com/news/Pacific-WebWorks-Expands-bw-2989491504.html?x=0&.v=2

6. Their customer count has grown 140% in the second quarter as compared to the first quarter. My understanding is that they have a pretty high rate of recurring revenue. Therefore, the increase in customer count should help to increase revenue. http://finance.yahoo.com/news/Pacific-WebWorks-Announces-bw-2126311900.html?x=0&.v=1

If they can earn an average of $0.03/share in each of the next three quarters that translates to annualized EPS of $0.12/share. Applying a modest PE of 15 gives a share price of $1.80.

The PWEB board is located here:
http://investorshub.advfn.com/boards/board.aspx?board_id=5121