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Catch the Wind Ltd V.CTW



TSXV:CTW - Post by User

Comment by j_harbaughon May 29, 2012 11:34am
333 Views
Post# 19956190

RE: RE: RE: RE: Humpty Dumpty

RE: RE: RE: RE: Humpty Dumpty

Let's break down a 5000 unit order. Let's assume a $50K price and a 10% margin net of all costs including tax. That leaves $5K of profit per unit. Assuming the order takes place to the tune of 1000 per year, first year profit would be $5K x 1000 = $5M. A 20 to 1 P/E would be a $100M market cap, 50 to 1 would be $250M market cap. So a 5000 unit order should assume at least a $1-$2 price range. And of course that is just one order. A 5000 unit order in year one (1000 over 5 years) and a second 5000 unit order in year two with the same terms would immediately double the target to $2-$4. Also with economies of scale we should assume that 10% net margin increases. A monopoly product should get closer to 50% margin but I'm being very conservative with 10%.

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