BB's Stock Haven

[TheStockman10]

GFCI has to be the most undervalued play I have ever seen, and heres why....

Look at the financials for the 6 months ending Dec. 2004 (I know, I know, I know - they're not audited, yet-supposed to be out by end of this month), you will notice that Grifco had $2.6MM in net profit with $7.5MM in revenues - that is a 35% net profit margin!!

As for your measly, little, anticipated annual earnings of $12MM: I actually believe it to be too low. In that same financials report for the 6 months ending Dec. 2004, Grifco offered a forward-looking statement, giving out guidance of $0.25 earnings per share for the 6 months ending Jun. 2005.

Now, this they did at a time when the O/S share count was 20MM, so that would then translate to earnings of $5MM, or with a 35% profit margin, $14.2MM in revenues. Combining this together with the previous 6 months gives $21.7MM in annual revenues anticipated for the fiscal year ending Jun. 2005. That's a lot more than your measly $12MM! Again, if we take the 35% net profit margin, this would mean $7.6MM in annual earnings!

Our current O/S share count is supposedly 31MM. This means that earnings per share should fall at about $0.25 for the year. Using the industry (energy sector) standard multiple of 12, this stock should be priced, right now, at the very least, at around $2.94 per share! That's right now!!

Now, the real kicker is that most securities (if not all of them) are priced such that fair market values are based on revenues and earnings looking forward, not backward! Thus, if you consider the 50 Jet Motors that went out last month, the 50 more that are going out this month; if you consider the recent acquisitions of both Global Oil Tools and Coiled Tubing Technologies and all of the other oil service tools; if you consider the vast possibilities with the Lyamec deal and Libya; if you consider Canada and Venezuela and China; then you now have a whole lot more intrinsic value weighing up into the share price looking forward! Oh, add to that audited financials and a listing on the big boards!

And so, looking forward, I don't see why we can't expect to anticipate 2006 revenues going to, say, $114MM with the net profit going to $40MM. At an O/S share count of 31MM, this is $1.29 in earnings per share. With a sector multiple of 12, this would mean a $15.46 share price going forward! Is this promising, or what?? A possible 38-bagger!!

Nevertheless, however conservatively calculated, the fair market value for the pps can in no way supplant the true market value for the pps that is actually being traded. The true pps value will always be shaped by the dynamic forces at play in the open market - forces that push and pull on the pps on a daily basis (that is, the buying and selling pressures).

Plus, look at this chaft, what a beauty..
http://stockcharts.com/def/servlet/SC.web?c=gfci

If this doesn't hit $1.50 here soon I will be very very surprised. Good luck.