I posted this back on the 25th of August, and am updating it with newer numbers...why???? It's Sunday, waiting on football!
This is edited from my private chat session with another member of ihub who isn't sold on the investment. (Numbers are based on a current price of .001)
Here's all I will say.....
Go back 10-12 weeks ago; share structure was basically 1.5 billion. Many invested somewhere in the (0007.0020) range I'm guessing? At .001 the market value is 1,500,000.
Sales in q1 was roughly 100k, q2 is 160k, with new products, lets just say q3 is 220k, and q4 is 320k. I think this is very conservative. Total sales will be 800k for 2011, using this estimate. At 1.5 mil mkt cap (.001), the sales to cap ratio is 1.875. In a decent economy, retail businesses typically sale for 6-8 times sales ratio. Using 7 as an average, I would estimate tytn would garner a sales price of roughly $5,600,000 or $800,000 x 7.
Also, the company has 1.1 million in debt, but 1.9 million in receivables and inventory, plus land and buildings free and clear should they go with any sale. That swings assets over liabilities by about 1 mil, again, hust my estimate, and furthermore the company is profitable, so there are no go forward losses to deal with in a current sale. So give assets over liabilities of about $1,000,000.
These values gives the company a fair value of .0037 currently, or 5.6 million/1.5 bil shares. This of course is my math, and my opinion, and doesn't take into account any of the ihub bs, hearsay crap, photos, anything, but straight numbers off the balance sheet and p&l.
So without the dilution, I show the stock potentially worth .0037 cents in a sale. But there is dilution concerns, so what if we are now fully diluted to 6.5 billion shares!
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Ok, let’s assume a 25% sales increase for the next several years. We end 2014 with roughly 1.93 million in sales. This isn’t too much of a stretch when you consider year one is just an increase of 200k, or 10 tractors, (avg 20k each) and no implement sales. That’s 3-4 small tractors on average in each of the 3 company planned dealerships a year, year one.
Now move forward 3 years and let's assume the new share struture is 6.5 bil shares, with sales of 1.93 mil. At 7 times sales, the sales value is 13.7 mil, which gives a fair value of the shares, with 6.5 bil outstanding of .0021. This is very conservative and would be a 210% pps gain over 3 years, not bad?
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Ok, now let’s assume a 50% sales increase for the next several years. We end 2014 with roughly 4.05 million in sales. This estimate would be just an increase of 400k, or 20 tractors, (avg 20k each) and no implement sales. That’s 6-7 small tractors on average in each of the 3 company planned dealerships a year, year one.
Again, we move forward 3 years and let's assume the new share struture is 6.5 bil shares, with sales of 4.05 mil. At 7 times sales, the sales value is 28.35 mil, which gives a fair value of the shares, with 6.5 bil outstanding of .0044. This is very conservative and would be a 440% pps gain over 3 years, again, not bad eh?
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Lastly, for illustrations sake, let’s assume a 100% sales increase for the next several years. We end 2014 with roughly 12.8 million in sales. This estimate would be an increase of 800k, or 40 tractors, (avg 20k each) and no implement sales. That’s 13-14 small tractors on average in each of the 3 company planned dealerships a year, year one.
Again, we move forward 3 years and let's assume the new share struture is 6.5 bil shares, with sales of 12.8 mil. At 7 times sales, the sales value is 89.6 mil, which gives a fair value of the shares, with 6.5 bil outstanding of .0137. This is very conservative and would be a 1370% pps gain over 3 years, nice?
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Now after muddling through the math, I'm left with this. Is there enough here to warrant a 50% sales increase year over year?
I personally think there is, with nothing else happening.....no Australia, no China, nothing but TYTN and their 3 or so dealerships. This 50% sales gain could result in me getting a 440% return, I'm in!
That's why I'm in, I invested in the tractor business, young, growing, with a chance to be an alternative offering for farmers. .0021 to .0137 in 1-3 years is a great mid-long term investment.
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Now, the icing;
What's the chances we sell no implements? No large tractors? No crawlers?
What's the chances we stay at only 3 dealerships over the next 3 years?
Could the deal with the Australian company result in increased sales if it comes to full fruition?
Could the finance division come to be and result in extra income?
Could the dealerships build to 100-150 over the next three years? BTW, at just 1 small tractor every other month (6 per dealerships per year x 20k avg x 150) is 18 million. The 100% sales ratio above is only 12.8 million, which kinda puts my numbers into perspective.
Lastly, is there any chance at all, the Chinese could want to R/M into TYTN to gain access into the American exchanges and use TYTN to grow the biz here stateside....don't count it out.
Now, we have just learned of a possible Joint Venture with YTO....what is it worth?????....my belief is the joint venture will allow YTO to ship tractors to TYTN with little to no capital needed, and the profits from sales will be some form of a 100% split. This could help get products here quicker with less cash up front and quickly ramp up profits, which is exactly what a small company like TYTN needs. YTO gains critical sales mass in the USA. Win/Win!
Lastly, will all 5 billion A/S shares be used over the next three years?
Now that I’ve shared this with the ihub’ers worldwide, lol, have at it…..just remember guys, this is just my way of explaining to a friend why I chose to invest in this company…it’s just my rationale, updated with recent events and new current price structures. You each have your own reasons….invest accordingly!
just sayin!
AI
