Blue Gem Enterprises (BGEM)

[bliz82]

Very interesting report. Not sure about some of their calculations but I'll stick with their PE or P/B ratios. Since they use a 28.6PE ratio for the industry average I'll use that. Looking at Price to Book, it starts around 15 and finally drops near 1 by 2014. So no bargain their (and that's based on current price). How about by PE standards.

In 2010, BGEM is forecast to lose 560K according to the report so no PE value there yet.
In 2011, BGEM is forecast to make 736K. So 736K/107M = .006 eps x PE of 28.6 = .196 pps. (close to where we're at now).
In 2012, BGEM is forecast to make 2.7M. So 2.7M/107M = .025 eps x 28.6 PE = .72 pps.
And then into dollar land in 2013 and beyond based on PE calculations and Grass Root's numbers.

That's assuming the SS remains unchanged which I assume will not be the case. I believe Grass Roots used 120M O/S which is probably a better hedge which would lower my numbers. By 2012 it would be 2.7M/120M = .022 x 28.6 = .645 pps.

So great potential down the road but for me, I don't see it in the next year or so unless they blow away these Grass Roots numbers.