Mike two things. you might be right in the long run on RX.V. I'm just saying FY 2013 will not show great growth, because it will be mitigating taxed versus untaxed earnings. RX.V business itself has alot of potential, and in the long run if that potential could be realized, you could definetly be right.
(1) I'm a short-term player (And short-term the valuation doesn't look very cheap, but is somewhat attractive under $1 Canadian. Having said that q3 earnings will be untaxed, and I wouldn't be surprised if it ran up like that .04 possible quarterin q3 was real, when at this point you should tax EPS, since taxes are so close to get and idea what their earnings power is. Then the market could sell it off q4/q1 based on taxes coming in. Granted it would probably be overvalued after the q3 run if they deliver the quarter I think they will.
(2) Admittingly I give a much lower PE to growth then most. My theory on growth is growth slows down eventually on all companies so why pay up too much for it. To Me I would pay up 10 times willingly for a company like RX.V, because we need multiple expansion and in something to have me buy it. Granted the stock if they hit your .04 estimate next quarter, in my eyes that EPS will be slightly under .03 if you tax it (which you should at this point, because it could be coming as soon as q4. So to be conservative I used about .025 if taxed. A 10 PE would be a $1 canadian, under $1 attractive. a $1.50 Top end of fair value right now, although I think it will trade there on a .04 quarter pre tax.
I did sell RX.V at around $0.81 before q2 earnings, people always use my sell point against me in the long run. The problem was not that I sold it, that I didn't buy it back in the low to mid .70's when I had the chance to. To me the stock is under $1.00 canadian is when it starts getting attractive at this point. Long term a $1.00 might prove to be a bargain, but my analysis only always looks out to the next quarter (Unless it is a seasonal company or a company whose earnings are not sustainable.) to give a valuation. All is just my opinion, and I could always be wrong though.
