Global Technologies Group, Inc. (GTGP)

[buccaneer1961]

choi-2.0 Share Friday, May 25, 2012 5:03:32 AM
Re: None Post # of 103605

Calculating Net Present Value on sales for GTGP,

The prevalent procedure in determining the net present value of GTGP is in the projected earnings. Those earnings would then be multiplied by a factor of what's usually consistent in their respected industry. If GTGP reports $38 Million in earnings from sales for 2012, $570,000,000 would be their net present value, according to the low end of what's comparable to their peers in the remediation industry… (However to be quite frank, the multiples are anywhere from 15x, as was calculated above, to over 100x…)

Calculating Net Present Value using cash flow/profits as a model for valuation is based on the company’s ability to generate a stream of profit or cash flow (sales less expense) projected over 5 years (not inclusive of start-up). Discounted future earnings are used which takes into account, the time value of money – cash anticipated in future years is discounted based on projected interest rates . Using a discount rate of 12% and projected annual future earnings of $42,560,000,respectively, thus to $38 Million in net profits.

Currently the most common way to calculate Net Present Value is to use a Published financial calculation tool commonly available from financial institutions (see http://cgi.money.cnn.com/tools/bizworth). These calculators provide a high/low evaluation based on a single year’s projected income and business type.
Using a combination of value based on sales and value based on cash flow/profits and due to the structure of GTGP’s Outstanding Shares, the investment was analyzed using the 2012 projected earnings of $38,000,000. Using the above calculator, a high/low value was established for 3 different sector classifications: Services, Capital Goods and Basic Materials. The values are:


Low high average,

1.)Waste Management Services $760,000,000 (20.3x average in the industry)

2.)Construction Services $870,020,000 (22.9x average in the industry)

3)Chemical Manufacturing 543,400,000 (14.3x average in the industry)


The mean average by this standard is: Net Present Value: $724,473,333 (or $19.00 a share)

This is the Net Present Value directly calculated by the revenue/cash flow models in different industries.


So, yeah, I guess you can see why I think GTGP will go to $10.00 this year, based upon that projected model alone, but that's just one of many paths to get past that mark my friends...

I'm getting released today, so heed my warning very closely, because this will be my last message to you guys...

Best of wishes and luck fellas...