How to possibly value this companyI've been looking to find another Generics company in Canada - but they seem to all be Private. So how do we value Vanc? Lets just value it like any other non-pharma retail vendor! Ive seen these between 30 and 70 P/E for solid growth companies like TJX, Overstock, etc (Amazon is being valued at 1000 PE) so if we do some quick math:
1. ~55mil shares out
2. Income was $100k; COGS was $50k (so lets use this: for every $1 in inventory they have, they will make $1 Gross Profit)
3. Fixed expenses were $600k
4. Inventory went from $350k to $800k (lets assume they turn their inventory once per Quarter or 4x) As well, they calculate Inventory at Cost - not at Retail.
For this next quarter I imagine Expenses will remain around $600k, and if they turn their inventory just 4 times a year (which is realy slow for retail, but possibly average for startups (assumption)) their inventory was reduced by $422,000 last Q but they pre-paid $182,000 for new inventory for this quarter. They had $710,000 of inventory last Q, and $325,000 the Q before. This means they had at one point $1.1mil in inventory. Since they were only paid $100k for $422k of inventory, this leads me to believe that they get either net30 or 60 payments and most of those payments weren't realized in the quarter. Adding it all up then; $322k + ~ $710k Profit or less is possible for this next Quarter (assuming inventory revolves just once per quarter...)
$1,033,000 - $600,000 = $433,000 Net Gain / 55mil shares = 0.007873 EPS x4(assuming 4 equal quarters) = Range between( $0.62 (20PE) and $2.20 (70PE))
I'd really like to see what kind of sales these guys can do, and what kind of expense control they have (hopefully not go too crazy with excellent sales).
I felt comfortable enough to buy more this past week; 15,000 @ $.295, 10,000 @ $.31, 10,000 @ $.33, 5,000 @ $.36
I will most likely sell these trading shares after the next large spike (if it happens next year when it hits $1.00)