Jemtec Inc V.JTC

Ttm earnings yield

[Torontojay]

In the last 4 quarters Jemtec has produced net income of ~ 
$ 635k. They have no debt and a cash position of
$ 2,023,154. The market cap is ~ $ 5.59m and ex cash it's ~ 3.567 m. 

earnings yield =~ 635k/3.567m =~ 17.8% 

In addition to having a very high earnings yield is the combination of these earnings increasing y/y. 

If these earnings grow at the risk free rate of 2.38% and a cost of equity of 10% then the company should be worth ex cash:

635k/(10%-2.38%) =~ $ 8.33m 

Add the cash balance of about $2m and you have a $10+ million market cap company or almost double the current share price. 

The company IMO is worth a lot more because they've proven to consistently grow net income at double digit rates.

[Philbert77]

thanks for the information and projections. The thing i am the most curious about is what happens when the CEO Eric Caton decides to retire or passes away? He holds 21% of the stock and is not a young man. He joined the company is 1987, so he is lkely at least 75 years old. Another large shareholder is Paul Crossett who holds 20% of the shares. I think in 10 years or less this company gets bought

[Torontojay]

I agree. The company will likely get taken over by a private equity firm. If the stocks price remains suppressed for many more years, then I see this as the likely exit for current shareholders. Who wouldn't want to take this private and collect all the free cash for themselves?  Another risk factor is, can the company continue to operate without the current ceo? Given his age, anything