Starfleet Innotech Inc (SFIO)

[kevenluck]

Disagree with your long term assessment. As Yoda point out this morning in his post, over a dollar very possible.

If SFIO could earn $10M per year that means that with a P/E of 10 then EPS is $10M/(O/S)=10M/554M=.018
Now P=(PE multiple) * (Earnings/share)=$0.18 per share. So if you think that SFIO can earn $10M annually then a fair price for SFIO is about $0.18/share.
If SFIO could earn $100M per year that means that with a P/E of 10 then EPS is $100M/(O/S)=100M/554M=.18
Now P=(PE multiple) * (Earnings/share)=$1.80 per share! So if you think that SFIO can earn $100M annually then a fair price for SFIO is about $1.80/share!
If SFIO were to say trade at a higher P/E ratio because of the real growth potential that the emerging ecig industry could offer then say they instead made about $25M and we put a p/e of 15 then