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Ceapro Inc V.CZO

Ceapro Inc. is a Canada-based biotechnology company. The Company is involved in the development of extraction technology and the application of this technology to the production of extracts and active ingredients from oats and other renewable plant resources. Its primary business activities relate to the development and commercialization of natural products for personal care, cosmetic, human, and animal health industries using technology, natural, renewable resources, and developing products, technologies, and delivery systems. The Company's products include a commercial line of natural active ingredients, including beta glucan, avenanthramides (colloidal oat extract), oat powder, oat oil, oat peptides, and lupin peptides, a commercial line of natural anti-aging skincare products, utilizing active ingredients, including beta glucan and avenanthramides and veterinary therapeutic products, including an oat shampoo, an ear cleanser, and a dermal complex/conditioner.


TSXV:CZO - Post by User

Bullboard Posts
Post by TheRock07on May 18, 2016 1:44pm
794 Views
Post# 24885468

The Best, by far, is yet to come

The Best, by far, is yet to comeLets examine CZO financials for observed and expected trends in its recent fiunancials.

1......SALES  TRENDS

.....over the past 3 years, sales have increased from $6.5 million to $10.8 million in 2015

....in 2015, quarterly sales increased each quarter from $1.7 million ( Q1 ) to $2.5 million ( Q2 ) to $3.1 million ( Q3 ) and to $3.5 million in Q4.

ln Q1, sales increased for a fifth consecutive quarter, reflecting the new generations of product.






2....LOOKING AHEAD

......the big and most transformational change in 2016 will be the commissioning of the new plant.
This is scheduled to begin in late Q2 or early Q3.

The new plant will provide Ceapro with nearly 6 times the capacity of its current plant.

Further, and equally important, the new plant will be able to produce multiple products at the same time.

Currently, Ceapro must use batch processing which is inefficient, as only one product can be processed at a time.

That is, expect to see gross margins to continue to increase in the future.


Given the growth pattern over the past 5 quarters, its possible to forecast 2016 sales and net earnings.


Assuming a linear trend in quarterly sales, 2016 sales can be forecast at about $21 million or more than double 2015 sales.

Gross margins should be at least 70 % in 2016, which implies  operating earnings of about $14 million.

Net margins should increase from the 41 % observed in 2015.
I will use  50 % ( Q4 net margins excluding special tax gains )  which implies net earnings above $ 10 million or about $0.15 per share.

Depending on how quickly the new plant can be commissioned, the above forecasts could be higher.

Fair value, considering the increasing growth profile, shoud be about $ 2.25, using  15 times net earnings.

Looking beyond 2016 to 2017 and beyond, with the new plant boosting sales, and gross margins, and several new products entering the sales stream, the upside could be well above $5


Bullboard Posts