Greystone Logistics Inc. (GLGI)

[vpagano]

As a follow-up to my previous post, here is an older article on Peco Pallet:

http://www.reuters.com/article/2011/08/31/us-column-cohen-peco-idUSTRE77U3Q820110831

Peco, which counts big consumer names among its accounts, but declines to name them, has booked consolidated average growth of 25 percent in revenue for the past four years; annual sales are now about $120 million. With an estimated 6 to 7 percent of the U.S. market for pallet rentals, it charges customers around $5 per pallet, Lee said.

Well now what do we have here? Three things I loosely pondered:

1) By these calculations, the total obtainable U.S. market would be:

$120 MM / 6% = $2 Billion

Now of course some of those sales probably included a little Canada, but $2 Billion is a nice round number. Would need to gross it up to 2013 from 2011, but GLGI would have barely 1% market share regardless.

2) If Peco Pallet was growing at 25% clip then Pritzkers paid multiples of sales one would think, aka a few hundred million. Let's just say $200 MM. If GLGI has 1/6th the market share Pagz, could it be worth $30 million or 3x as much as today? But they had 25% growth and GLGI doesn't, what's the point? How could they get there? Well...

3) The article states Peco had average growth of 25%, this could be obtained by a smaller compay through doubling sales via a large customer every couple of years for a while.

The article also makes the point that there is a heavy up-front cost for customers, but this partially makes said customers "sticky" because the company would be incentivized to do whatever it takes to keep them.

Meaning if GLGI were to pick up another large beverage company as a customer it could take possibly take a step up in revenue to another sustainable level, showing the same 25% average growth in sales.

Sorry, if that was some oddball rambling but just considering the potential of all my holdings today.