Replies to post #273363 on Sulja Bros. Building Supplies, Ltd (SLJB)

[trust darwin]

Thanks 12ring! Seems kind of hard to argue with.

[qtipjoe]

Leave it to me. I've done it again. I always seem to be the one to open Pandora's box. Reading your post I would have to say you are one of the most intelligent people I know. You use numbers. You add and subtract. You use brain power to the end of the line. Then you look back and find you are in pinky land. 0.055 if we sneak out of this mess and zilch if we do not. I need a nap. I have a headache. Please God no more intelligent people today.

[Disinterested One]

Here's a different set of numbers to work on (I hope this contributes to your headache, joe):

PV said the Sulja operations in Ontario were grossing about $1.1m per month. Add in the Sams revenue of about $700k to get $1.8m per month. That's $21.6m per year.

Home Depot and Lowe's both have net income that is about 6.5% of their revenue. 6.5% of $21.6m is $1.4m. This assumes that Sulja is able to run their operations as efficiently as multi-billion dollar corporations. I doubt this, however, since they are closing the operations in Harrow.

Home Depot and Lowe's both trade at about 16x net income. Let's give SLJB a 20x multiple. That would value them at $28m. Divide by 600m share outstanding. The result: $0.047. If the revenue figures were in CAD, then multiply everything by 0.95, yielding a share price of $0.044.

Of course all of the revenue numbers for Sulja's operations are based on info allegedly divulged by PV and repeated here by longs who visited him. If Sulja's net margins were lower than industry standard, then they would have a corresponsingly lower share price. If they somehow could manage to have higher margins than places like Lowe's & Home Depot, then the expected share price would be higher. The other item to which the equation is sensitive is, of course, the multiplier. I could not find any public companies in the home products/construction industry that could be called similar to Sulja. I.e., small, and with growth opportunities. If anyone knows of a comparable company from which we can take audited numbers as a basis for comparison, please speak up!