Replies to post #616 on Grifco Inc (GFCI)

[cleverrox]

The thing is Dr Bill, CTT is not currently being valued in the price of Grifco. Management has made no statements on how much CTT is earning in the Jul-Sep quarter. So basically the market has been valuing GFCI using the $4.4M net income number from yesteryear, which gives us a P/E ratio of about 3. A P/E ratio of 3 is not shocking for a pink, though it seems a bit cheap to me.

So if CTT is announced to be earning $4.4M a year, that doubles the known income and the share price or the combined companies would be $.60 instead of $.30.

Some better case scenarios would be CTT is earning $10M after tax per 50 Jet Motors and has an immediate $20M per year net after tax income with some good growth potential. At that point, we probably will all be sending flowers to Jim Dial and flying there to buy him dinner. Of course if they were that awash in cash, I think they wouldh't have sold 12% of CTT this cheap. Of course I'm assuming the paintball business is worthless and that may not be the case.

[Been_Burned_Before]

Dr Bill: I absolutely disagree!

The CTT spin-off from GFCI will most likely result in leaving two distinct parts, whose par value is significantly greater than the whole. This is what a dividend typically does -- it increases shareholder value! If it were not so, it would not then be a dividend, right?

Furthermore, the CTT spin-off puts CTT in a position to very quickly rise in pps value; thus, increasing shareholder value even more. If one were to ONLY account for 3 sets of 50 Jet Motors (and NOTHING more) at 35% net profit margin, at 85.72 shares O/S and at a conservative P/E multiple of 12, we then are looking at a separate company easily valued at $3.50 per share -- that is NOT paltry by any means.

And that's not even accounting for all of the other tools in the CTT toolbox, especially the promising Rotor Jet. That's not even accounting for the positive developments that are still left behind in GFCI with the Lyamec/Libyan Govt. partnership!!

GET REAL, Dr Bill!!! Every way you slice it, this is a most incredible deal!!!

Been_Burned_Before