Plastic2Oil Inc (PTOI)

[jimmenknee]

It's the wrong focus IMHO-- Net Profit = ?

e.g. finviz.com lists 33 companies in the Independent O&G industry w/ Gross Margins > 80%

Only 6 have Gross Margins over 90%

If you throw out high & low and average the remaining 4, Net Profit Margin = 23%

Of those 33 companies that have Gross Margins > 80%, the Net Profit Margins break down as follows:
6 < 0%
24 > 5%
23 > 10%
16 > 20%
6 > 30%
2 > 40%
1 > 50%

So IMO, without insight into the operating margin, it's fair to assume 20% Net Profit Margin is reasonable

Plugging in 23% to projected JBI production numbers as:
a. 216 bpd
b. $110/bbl
c. 328.5 days production (90% production rate)
Against Share Structure as static:
a. 73,049,709 shares outstanding

Gives you an EPS of 0.024757316

Which means JBII currently trades at over 60x projected PE

So IMHO, you have to buy-in to the argument of "disruptive technology" = projected PE multiples above 60x and/or assume RKT site is up by EoY '12 & that it duplicates home base's production (which is theoretically improbable given the composition of raggertail) because then the projected PE multiple is reduced to > 30x ...

... which is-- referring back to the 33 Indy O&G companies -- in line with the industry average of 36.79x (throwing out high & low and averaging remaining 25 that show a PE)

Speculative value remains in this pps area IMHO (but again full up commitment to a speculative "investment" only if one totally ignores pending SEC & CAS actions)