ELTK...see today's ticker & see below
Posted by: Bo14172
In reply to: None Date:3/4/2005 1:10:16 PM
Post #of 36831
ELTK, Sleeper Du Jour.
ELTK vs SIRI
ELTK @ $1.61............ELTK's O/S = 5.49 million shares!
SIRI @ $5.74............SIRI's O/S = 1.26 BILLION shares!
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Revenue for the 3 previous reported quarters:
1-1-04 to 9-30-04
ELTK - $20.1 million
SIRI - $42 million
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Net loss from 1-1-04 to 9-30-04:
ELTK - ($1.7 million)- an 20% improvement over 2003
SIRI - ($450 million) - worse than 2003.
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SIRI's o/s is TWO HUNDRED AND FORTY times the size of ELTK. 240!
So let's project ELTK's market value here...
First, note ELTK is trading at a market cap WELL under their annual revenue base. It's safe to assume ELTK's annual 2004 revenues will come b/w $25 million-$30 million, and pushing closer to break even.
I'm going to show conservatively what ELTK's market value should be by using SIRI's share price, known fundementals shown above and market emotion.
Siri is at 5.74. ELTK's revenue is 47% less than SIRI's. Thus based on this fundemental factor, if SIRI had the same revenue as ELTK, we could expect the price to be $2.69/share with their current 1.26B o/s.
Let's get serious about making this a conservative valuation. Some would say, 'ok Bo, but you know as well as I that SIRI is a market darling and it's price is largely based on that'. My response is 'Absolutely true, I couldn't agree more'.
So for valuation purposes here let's take out 99% from the price, you read that right, reducing the $2.69/share by 99% which we'll attribute to SIRI's popularity. Let's all agree that this is a maximum amount and certainly going 'overboard conservative', but were going to do it. $2.69/share x removing any and all exposure, interest and popularity (.01) = .0269/share.
We can say then, SIRI's price with all the above characteristics of ELTK factored in and SIRI's current 1.26B o/s level is .0269/share.
So in reality, to translate ELTK's price in relation to SIRI:
.0269 x 240 = $6.45/share
The 240 is how many times larger SIRI's o/s is in relation to ELTK.
The above was using 2 confirmed fundemantel factors (revenue and o/s) and 1 ultra-consertative market emotion factor to arrive at this price.
Oh yea, I'm sure you noticed I didn't even include the fact that SIRI's bottom line is 264 times worse than ELTK in my valuation.
In sum ELTK has a very low float, move strong on light volume and currenty is undervalued. You only have to look as far as the market cap versus revenue stream as well as considering the above. Look at SIRI's and other companies ratio, then look at ELTK's ratio. I see upside here.
Bo
