Isodiol International Inc ISOLF

RE:Determining value based on cash flow and expected cap rate.

[jb24]

Another great post Bambam, keep up the good work.

bambambigelo wrote:
 
Definitions:

Cash flow is normalized cash flow excluding extraordinary expenses.

Cap rate expected rate of return ex 4% rate of return = a 25 times multiple.
Ex.
 
Isodiol cash flow at May 2018 is 40 million annually with no further growth rate. Which we all now is not the case Isodiol is growing revenue (cash flow) exponentially.
 
40 x 25 multiple = 1 billion based on May s annualized revenue.

Now we can take it a step further next year’s expected annualized revenue is 180million +/-
180 x 25 = 4.5 billion market value.

Now another fact is that in the MJ sector you get a higher multiple.

GW pharma valued at 4.2 billion (5.5 billion cad) us, 5 million quarterly revenue 
5.5 b / 20 m annualized cash flow =  275 x cash flow

Medreleaf   valued at 3.2 billion by aurora offer, 10 million quarterly  revenue
3.2 billion / 40 million annualized = 80 x cash flow

Hiku offer from canopy 267 million, 1 million last quarter for revenue, nothing in previous 3 quarters.

267 million /  4 million annualized= 66.85
 
You add the 3 examples up

275 + 80 + 66.85 = 421.85 / 3 = 140.6166667 avg multiple

140 x 40 million (may annualized) = 5.6 billion

Now in fairness I would normally use at least 10 comparable’s,  however,  Isodiol  is  grossly undervalued trading at under 4 times mays annualized revenue, and our peers between 70-100 x.
 
Clearly using either method of appraisal, shows just how under valued Isodiol is.

have a nice day