Repost of Ckbaby's PPS Evaluation; Nice Job Ckbaby.
**PPS Valuation Potential Review**
Lots of new eyes on TDGI which is great ... if your a chart/momentum player, do a little more DD than usual and you'll most likely find like many longs, this one is real, growing and has the ability to be life changer without the risk that comes with almost all .pk's. You may want to consider holding a little longer term position ... the potential is truly mind boggling!!
TDGI PPS Review ...
TDGI's PPS Short Term Target Updated
This continues to be just the consolidation phase of getting closer to what I would call a 'reasonable' valuation.
There have been many discussions and debates on the board about what is the true value of TDGI today (forget about the potential two to three years from now). The consensus seems to be an P/E multiple for a mid-cap film or entertainment company on the extremely low end at 15, on the low to mid end at 20, on the fair side at 25 and on the more aggressive end say 30. Pulling the base business of $17MM and additional projected revenue of $22MM (which still holds assuming 12 and HappyThankYouMorePlease perform as it appears they will), we get total revenue per year at $39 million. Assuming a very conservative 22% pre-tax margin (from their base business margins), you get an $8.55 million pre-tax margins. We have a total shares O/S at 461,206,692 and float unchanged since December of 269,600,578.
So what does this mean for PPS:
Scenario #1 - (15*$8.55MM)/461,206,692 = $0.28
Scenario #2 - (20*$8.55MM)/461,206,692 = $0.37
Scenario #3 - (25*$8.55MM)/461,206,692 = $0.46
Scenario #4 - (30*$8.55MM)/461,206,692 = $0.56
Scenario #5 - 10 Bagger Stock Estimate = $0.779 (Increase Revenue plus add in the current book value)
NOTE: Scenario #1-#4 DO NOT even include the current book value which sounds like it will exceed the $0.058 Q1/Q2 non-audited financials, especially in light of the distribution agreement with 20Th Century Fox.
Although it was nice to push back through the $0.05 level on Thursday/Friday, again, this stock has barely started to get to its true value. I sill fully expect to reach at least $0.30 in the not too distant future (months/quarters, not years) - yes, it has been a little longer than we anticipated but hey, we're in the land of the pinks ... trading and true PPS valuation are not inclusive!! Many of us have been long on this from December and Eric (our CEO) continues to deliver on his business plan (but the great thing is he has so much more up his sleeve than I dreamed of just 1 week ago).
So my fellow TDGI'ers, we still very likely have an 8-10 bagger plus on our hands into 2011.
This stock will test your patience, your risk, your fortitude but I also believe it will test your ability to spot a diamond in the rough.
TDGI 2011 Charter Member
