China Armco Metals Inc. (CNAM)

[viking86]

If their average price (especially if they bought in Oct and Nov) is low than they can make almost $100 profit per ton sold in 1rst Q

a $100 profit on $500/ton sold means a net margin of 20%. Let's take a stinkin' low estimate of 10% average net margin for 2011 for the scrap metal biz. At 50% capacity of 850 tons/yr at $500/ton, we get a profit estimate of :

0.5x 850 x 500 x 0.1 = 21.2MM

Add 100MM rev from the ore trading biz at a stinkin' low NM of 5%, we get an additional profit of :

100 x 0.05 = 5 MM

Total est. 2011 earnings = $26.2MM

fd = 17.6MM

eps = $1.49E

At $4/sh, that's a forward PE of 2.7 !!

Since I am expecting 2010 eps of about 0.11, 2011 could be a damn good year with eps growth of (1.49-0.11)0.11 = 1255%

Are we allowed to dream a little?