From: foxtrot6
Jul 19 2005
If you're not good with numbers or you just don't want to read on, here's the picture, HISC will realistically be $0.80 to $2.40 in three years. End of conversation...
For those of you who need facts and details, this is your lucky day because I had 15 minutes to spare.
I'm an accountant specializing in the stock market. Here's why I'm in HISC.
In 2004, sales were $2,000,000 with a net profit of $550,000. That is a profit margin of above 25%. A "normal" profit margin is around 5%, if profitable at all. The reason why HISC has such an extreme profit margin is because revenues are not only hardware based, but also software based. And receiving recurring revenues for software, basically there's minimal expense. So that's good. This information is all according to the
July 5th PR from Primezone.
Now here's all the calculations. According to the June 22nd PR, they expect sales to exceed $125 million in the next 3 years combined, or roughly 40 million annually.
$40,000,000 annual sales X 25% profit margin equals $10,000,000 in annual profit.
Divide $10,000,000 by shares o/s. $10,000,000 divided by 500,000,000 shares is an EPS of $0.02. We figure that with microcaps and small caps, even companies with market capacities near a $1 billion, a conservative P/E ratio would be around 40. For example TASR, SONS, have PE ratios of 40 and 65 respectively. Google is considered a good stock and it's P/E is 122.
What's all this mean? With an expected EPS of $0.02, with an P/E ratio of 40, HISC can be expected to stabilize near $0.80 in three years. With a P/E ratio of 60, we can expect HISC to be $1.20 in three years. With a P/E ratio of 120, we can expect HISC to be $2.40 in three years.
And when I say "expect", it should stabilize there. So not to forget the fluctuations. So if we stabilize around a P/E of 120, it can fluctuate as high as 150 (way overvalued and a great time to sell) and you'd be able to sell it for $3.00.
Currently, as of end of 2004, with a $500,000 profit and 500M shares o/s and a PPS of $0.10 we're just below a P/E ratio of 100.
But take a look at company like SIRI, 2 billion shares o/s, losing money and they're at $6.00 PPS, what a joke.
HISC has roughly 550,000,000 shares o/s, profitable, bargin price, and explosive potential in a growing and demanding market. HISC is a winner, no brainer, I could go more into details but if you've read this far, you know as well as I do that this stock is truly a hidden gem.
AI
