IMHO, $2 by 2015 is a big stretch, assuming no R/S. If I could get a guarantee that CERP would be only $0.50 by 2015, I wouldn't sell a single share. (I am not a trader.) This is still a very risky stock and investing here is clearly not for the faint of heart. The company is still losing money and diluting shares. But IF the Italy ban pans out and CERP can deliver on its Q1 CC forward-looking representations, a PPS of $.50 is doable by 2015 or 2016.
To reach a PPS of $2 would require an eps of $0.135. Assuming a total of 750M outstanding shares, the company's net earnings would need to be about $100M. This is earnings, not revenues. Considering the low margins in this industry, I would expect CERP must generate over $500M in revenues to reach $100M in earnings. While it is great to have an optimistic outlook on an investment, $500M by 2015 would require more tsunamis than all of the worlds oceans can hold.
A share price of $0.50, however, would require an eps of only $0.033, which would translate to roughly $25M in earnings using a very conservative PE of 15. CERP can hit this number with about $100M in revenues, maybe less with higher margins or a higher PE multiple or both. If CERP's PPS hit $0.50, that would be about a 1,900% gain from today's close. I'd be willing to wait two to three years or more for that type of return.
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