Redman's

[redman_2014]

CCLWF Projections using current warrant price of $1.32

Share price: $8.95
Shares o/s: 8.9M
Warrant price: $1.32
Warrant strike price: $7.50
Warrants o/s: 15.55M(will raise $116.5M when converted)

The projections include the cash and use 25.7M o/s(includes the warrants) and are based on announced 2009 numbers:

2009 Net Income = $26.20M($1.02 eps using 25.7M o/s)
$8.95(share price) - $4.57(cash) = $4.38 adjusted share price.
$4.38/$1.02(Expected 2010 eps) = PE of 4.29

Projections for price of common(using 2009 eps of $1.02):

PE of 5 = $9.67(intrinsic value of warrants = $2.17)
PE of 6 = $10.69(intrinsic value of warrants = $3.19)
PE of 7 = $11.71(intrinsic value of warrants = $4.21)
PE of 8 = $12.73(intrinsic value of warrants = $5.23)
PE of 9.5 = $14.25(intrinsic value of warrants = $6.75)

Warrant potential:

Share price of $11 = $3.50(165% upside)
Share price of $12 = $4.50(241% upside)
Share price of $13 = $5.50(317% upside)
Share price of $14.25 = $6.75(411% upside)


Summary:
Using the cash method for the warrants it only requires a trailing PE of 9.5(which brings the o/s to 25.7M) to make it to the $14.25 redemption price for the warrants. It currently has a PE of 4.34 on a trailing 2009 basis.


-Adam