Replies to post #73235 on Capstone Companies Inc (CAPC)

[mareen]

Disagree, at least for the next few years and possibly not then. Growth by acquisition and licensing deals is more likely.

[abcddavis]

The price on an outright sale of the company to a larger company would be heavily discounted from what we expect the stock value to be. A reasonable expectation for a company the size of Capstone with Capstone's performance would be somewhere around 20 times EPS. We are nowhere near that, but that is what all of us are looking for. However, a larger company valuing Capstone for an acquisition will value the company based on a multiple of EBITDA, not a multiple of EPS. The current going rate for a company Capstone's size is 10-12 times EBITDA. Stewart announced a 2016 EBITDA of $3,497 in his Roth presentation. At 10 times, that only values the company at $35M. A little higher than that if Stewart could get 12 times. Such a sale would provide us shareholders with around $.73 per share.