Pounce Technologies Inc. V.POI.H

RE:RE:RE:RE:RE:RE:RE:What's with this stock?

[lscfa]

Since you do not know the story well do not make clueless assumptions. SLC is basically a software company, which typically have high gross margins. As revenues grow they largely fall to the bottom line and increase net margins. Salman estimates 2017 eps and cfps at $0.08 and $0.09, respectively.


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sportguy98 wrote: Never said revenues wouldn't ramp up. I don't know the story that well so it's hard for me to comment. However, I can safely say that those revenue targets are awfully big and it's exceptionally rare that companies grow at that rate (5.5M to 18.6M to 30.6M). That needs to be reflected in the discount rate used. I truly wonder what the percentage is of companies that have given these kind of revenue projections and have not delivered on them. I'm willing to bet it's in the high 90s%. Furthermore, growing revenues to 400k per quarter isn't difficult so past performance here can't be used to measure future performance.

Also, like I said, the dilution of shares will partially or mostly destroy the value created. If they do 30.6M in sales in 2017 and they have 150M shares outstanding by that time, they'd only earn $0.04 in EPS (assuming a 20% EBIT margin which is the net income margin anyways as they have NOLs). For every 1.5M they earn, they make $0.01 in EPS or in other words for every share you own, you would in theory get back $0.01 for every 1.5M in profit earned by the company were they to give back profits to shareholders -- that's why share structure is so important. Stock is currently trading 11.5x 2017 earnings assuming they can even get to 30.6M in revenue.

So while I don't know the story, I'd be very cautious with these projections and I'd do insane amounts of due diligence to valid those projections. I could be wrong. But either way, I see a much better risk/reward with AKR.V.

Matthew

lscfa wrote: Your annualizing Q2 results is flawe when we know for certain that JC penny was activated shortly after the quarter end, and revenues will only ramp up from here.