Great post on CHID from RB
Btw, just looked up the trailing P/E ratio of FORD (a profitable enterprise that like CHID makes accessories for cell phones), and it is 26. If you apply that P/E to CHID's $3MM in 2005 net income, you'll arrive at a market cap of $78MM (to translate into a price per share, divide by our 54MM in outstanding shares, and you'll note that equals $1.44/share).
So obviously CHID is severely undervalued, but FORD also went through a stage in it's life, it took a lil' while for the market to fully embrace that company as well, but FORD continued to churn out great earnings quarter after quarter (just as CHID has been doing of late) and eventually, BOOM, the market fell in love, and like a rocket, it ran from $2 to it's current level of $25 in less than a year.
In any event, long story short, I expect CHID could realistically make between $4 and $6 million next year in net income, and I think that a P/E of 25 is a fair multiple to use in extrapolating a value for the company, and it's stock.
Eric
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