Replies to post #165704 on Value Microcaps Motherboard

[hweb2]

TIK could certainly keep zooming higher. Especially in this hot market. I didn't have much. Wish I'd loaded up around $4.30 when you and Guy were discussing it. And was now only letting a few of my shares go and holding the rest into the Q4 preannouncement. Guess we'll know Q4 is good if they preannounce it. Ha!

[wadegarret]

pmony5/Hweb- TIK

Do you realize the article saying the company will post $.35/qtr, is basing this on $7M/qtr, and in what they are calling EBITDA non gaap EPS. What does EBITDA mean when valuing a stock ? In my opinon- nothing ! Why ? Because it's rediculous to add back to Net Income any items which are ongoing ie interest expense, depreciation, taxes, etc. So I decided to crunch the numbers myself, using $6.5M/qtr, 30% margins, and I've added 30% more S,G,& A, as they're projecting 30% more in revenues. I'm taking Income from operations less interest expense, but adding back amortization and stock based compensation as so many companies do. Here's what I'm coming up with.

About $.11/qtr untaxed. Yes the stock is actually now selling at about a 12-13 PE untaxed going forward, assuming all of the above, and that margins will stay at 30%. Seems to me this guy that wrote the Seeking Alpha article is not using a rational valuation model, as I'm coming up with about one third the EPS as him, and I believe I'm giving the best scnerio.

Do you have any idea how low the PEs are on so many stocks we follow if we used EPS based on non gaap EBITDA as our valuation model !