pennyman
I know it's a penny stock and I did fundamental evaluation from the data provided by the company. That's all i did as well as other stocks on Nasdaq and NYSE. I even give P/E of 15 to 20. I even give them the benefit of the doubt with 5.1% net profit margin .. and full $5 million in revenue.
And the evaluation shows the company is overpriced right now by a lot. Having said that as I have in all the posts since the DD post that luckily for EXPH, the market is not based on fundamental alone. But fundamental is where the market will evaluate it at eventually.
I have to admit that I expect a much better financial statement form the company. The 2008 financial was HORRIBLE. I didn't even mention it or took it into consideration. I did DD forward based on 2009 1st qtr. What will guarantee that 2009 at the end won't repeat that of 2008's right?
For some reasons I remember a PR last year that JD was saying sales would be a lot higher ...$5 - $10 million or even that $22 million revenue number was floating around here. I did DD on it months ago based on huge number and huge margin. And i was very high on EXPH. But after the statement came out, I am very disappointed.
In 2008, sales was $2.3 million and NET LOSS was $943K. That's horrible by any standard. Operation loss was $675K. Basically each $1 receive in revenue, the company spent $1.25. Interest expense alone was $325K and that was after net loss.
Now make me think about someone brought up a point that banks must know something and see what they like so they change the term of the loan and convert some short-term to Long-term debt. MAYBE They have NO CHOICE. Where will the company find money to pay interest? So to avoid writing down, they extend the loan and hope to get the money back sometimes and avod the write down?
If my calculation is right, the company will earn net profit of less than $300K a year. It's going to take 3 years or so to pay of the portion of the Short-Term note.
... OUCH
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