Replies to post #8534 on PositiveID Corporation (fka PSID)

[somoneysportspicks]

It doesn't matter when the split is only matters if they get the contract. The RS does nothing to earnings until/if they dilute. When they dilute is when earnings per share will change. Let's say they do 1-10 split before contract, then they have 36.2 million shares outstanding. And lets assume that my projections for earnings from government contract are correct. You would have earnings of,

year 1, 21mil rev x 20% = 4.2 mil/36,206,000 shares outstanding = .12, .12 cents of profits in year 1
year 2, 42 mil x 20% = 8.4 mil/36,206,000 = .23
year 3, 63 mil x 20% = 12.6 mil/36,206,000 = .35
year 4, 84 mil x20% = 16.8 mil/36,206,000 = .46
year 5, 105 mil x 20% = 21 mil/36,206,000 = .58, 58 cents of recurring revenue for the foreseeable future.

With these earnings per share at a P/E of 20 =
year 1, .12x20= 2.40 per share
year 2, .23x20= 4.60 per share
year 3, .35x20= 7.00 per share
year 4, .46x20= 9.20 per share
year 5, .58x20= 11.60per share

With these earnings per share at a P/E of 50
year 1, .12x50= 6.00 per share
year 2, .23x50= 11.50 per share
year 3, .35x50= 17.50 per share
year 4, .46x50= 23.00 per share
year 5, .58x50= 29.00 per share

This would be share price before dilution but after contract is awarded and after RS. Even if they dilute there is allot of upside in this stock. Let's say they dilute by 50% so they issue 18,103,000 new shares to make a total outstanding of 54,309,000 then price per share projections would be.

year 1, 21mil rev x 20% = 4.2 mil/54,309,000 shares outstanding = .077, 7.7 cents of profits in year 1
year 2, 42 mil x 20% = 8.4 mil/54,309,000 = .155
year 3, 63 mil x 20% = 12.6 mil/54,309,000 = .232
year 4, 84 mil x20% = 16.8 mil/54,309,000 = .31
year 5, 105 mil x 20% = 21 mil/54,309,000 = .387, 38.7 cents of recurring revenue for the foreseeable future.

With these earnings per share at a P/E of 20 =
year 1, . 077x20= 1.54 per share
year 2, . 155x20= 3.10 per share
year 3, . 232x20= 4.64 per share
year 4, . 31x20= 6.20 per share
year 5, . 387x20= 7.74 per share

With these earnings per share at a P/E of 50
year 1, .077x50= 3.85 per share
year 2, . 155x50= 7.75 per share
year 3, . 232x50= 11.60 per share
year 4, . 31x50= 15.50 per share
year 5, . 387x50= 19.35 per share

Even with 50% dilution after RS these are very nice returns. Let's say you had 100,000 shares then there is 1-10 RS so you have 10,000 shares and they get the contract and my projections are correct your 10,000 shares would be worth.

With these earnings per share at a P/E of 20 =
year 1, . 077x20= 1.54 per share x 10,000 shares =$15,400
year 2, . 155x20= 3.10 per share x 10,000 shares =$31,000
year 3, . 232x20= 4.64 per share x 10,000 shares =$46,400
year 4, . 31x20= 6.20 per share x 10,000 shares =$62,000
year 5, . 387x20= 7.74 per share x 10,000 shares =$74,400

With these earnings per share at a P/E of 50
year 1, .077x50= 3.85 per share x 10,000 shares =$38,500
year 2, . 155x50= 7.75 per share x 10,000 shares =$77,500
year 3, . 232x50= 11.60 per share x 10,000 shares =$116,000
year 4, . 31x50= 15.50 per share x 10,000 shares =$155,000
year 5, . 387x50= 19.35 per share x 10,000 shares =$193,500

So even after dilution there is allot of money to be made IF they get the contract. Also when they dilute they will be getting assets from the dilution whether its cash or deferred earning to employees.

All above are just my opinion.