Posted by: sower
In reply to: None Date:10/13/2004 5:28:39 PM
Post #of 229
The last couple of days, I’ve been looking at AMEX stocks with outstanding shares ranging from 160,000,000 to 223,000,000. I wanted see at what price they were selling to get a feel for what Calypte might do given the same criteria. I also checked to see the valuation (last years earnings ÷ outstanding shares = true share value ÷ PPS.) for each stock. Valuation is a way to gauge what investors “expect” from the stock. It shows what they believe will happen down the road, so to speak. If they’re willing to put their money into a stock that’s not earning much, that means that they are looking ahead to higher earnings or some expectation of better days to come, and they want to be there before it happens.
ISON is an example of this. The stock recently annouced a Home Land Security Department that will manufacture a hand held bomb detection device for use in Airports etc. In two days the stock went from $1.68 to $3.09. The revenues for 2003 and the OS hadn't changed, but because of the potential, investors were buying in. That is why you can't always look at just the revenue and OS, but these figures give a reference point for estimating the future PPS for Calype.
There are 8 AMEX stocks that meet the range of revenue that Calypte might achieve in the next few years. The revenue from potential sales in Africa, China, Russia, India, US, Canada, Japan & Europe is hard to calculate. The only numbers we have right now are what Dr. George gave for China; 30M – 50M in the first year, building up to 100M by the third year.
Because there is no way to know for sure, I chose $200,000,000 as the top amount for revenue, Calypte may do more but that's as far I wanted to go for this example.
Here are the companies and their data:
Co.----------------OS------------------2003 Rev.-------Todays PPS--------Valuation
KRY -------178,000,000 ---------$ 12,000,000 ---------$ 3.05 --------------45.2
EAG -------202,000,000 ---------$ 13,000,000 ---------$ 0.66 --------------10.3
HEC -------260,000,000 ---------$ 29,000,000 ---------$ 0.61 ----------------4.3
SCMR -----172,000,000 ---------$ 44,000,000 ---------$ 3.81 --------------14.9
NXG -------200,000,000 -------$ 168,000,000 ---------$ 1.93 ----------------2.3
CDE -------213,000,000 -------$ 111,000,000 ---------$ 4.37 ----------------8.4
DNP -------220,000,000 -------$ 157,000,000 --------$ 11.23 --------------15.7
FNSR ------223,000,000 -------$ 208,000,000 ---------$ 1.29 ----------------1.4
Seven out of eight companies are trading at lower valuations than the 16.4 for Calypte. Also, non of these companies are in the Healthcare sector. But these are the only companies on the AMEX that meet the criteria for OS & Revenue.
If we look at our competitors (Bio-Rad, Trinity Biotech and OraSure) the highest valuation is OraSure at 5.4 times earnings. Using that as the valuation for Calypte and the current 169M OS the figures would be:
Revenue------------PPS
50,000,000 -----$ 1.60
100,000,000 ----$ 3.20
150,000,000 ----$ 5.70
200,000,000 ----$ 7.65
Here is the same revenue and OS data using the current 16.4 times earnings:
Revenue------------PPS
50,000,000 -------$ 4.89
100,000,000 ------$ 9.75
150,000,000 ----$ 14.68
200,000,000 ----$ 19.58
No one knows what valuation Calypte will have when the revenue reaches $200,000,000, or even if it will reach that point, but, using the conservative figure of 5.4 x earnings and the current OS, these stock prices are reasonable, and at 16.4 times earnings they are very good.
sower
Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy 
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