TAAT Global Alternatives Inc C.TAAT

RE:RE:TAAT Moving Fast 4500% STRONG BUY

[Differenza]

tdon1229 wrote:

Differenza wrote:

TAAT Moving Fast 4500% STRONG BUY

 

The latest news were simply excellent. Well done Setti & team!

 

"In Q2 2021, CROSSMARK will service over 7,000 convenience stores in the state of Ohio."

 

So from having something like 150 stores (which are not Crossmark stores) as of today to more than 7000 in Ohio. Wow, that's an increase of like 4500%!!!! Let's say each of these stores only buys one cartoon per each (original, smooth & menthol) per year. 1 cartoon consumer price is like 40 USD, 3 cartoons = 120 USD

 

Per year 120 x 7000 = 840.000 USD.

 

If they instead buy 3 cartons each month then it's 840.000 USD  x 12 = 10.080.000 USD per year.

 

And if they instead buy this amount of cartons each week then we have 840.000 x 52 = 43.680.000 USD. Apart from this we have the online sales covering most states in the US. Let's say TAAT will sell around the same amount online as the total store sales in Ohio. That would be around 90.000.000 USD in sales from the online store and Ohio combined. Image (not if, but when) we move to the other states through Crossmark's channels with their 97.000 stores outside Ohio. 

 

If we give TAAT a low 10x sales valuation (should be higher since TAAT is growth company) we are talking about a Market Cap of 900 MUSD. Market cap as of today is around 400 MUSD. That's an increase in share price of 125%. 

 

If we compare to JUUL when Altria invested in them they got a 25x sales valuation. And if we compare to RLX, the Chinese vaping company that Setti mentioned, they have like 100x sales. And Beyond Meat is around 25x sales. 

 

If we apply 25x sales to TAAT we should have market cap of 2,250 BUSD in Q2/Q3. And that would mean an increase in share price of 460% in maybe 3-6 months.

 

This will happen and like I've written before TAAT will become a billion dollar company already in 2021. 

 

TAAT is making all the right moves. The risk/return is extremely good from here. 

STRONG BUY IMO.

 

 

Differenza,

 

You continue to ignore your fundamental error.  In calculating the sales that accrue to TAAT from sales by retail outlets, TAAT's customer is the distributor at wholesale pricing, not the full per carton retail sales figure.  Setti estimated a 54-46 split prior to launch, but that remains to be confirmed.  

A better estimate for the retail numbers for Ohio is about half of your number.

1 carton sales revenue to TAAT is ~$20, not the $40 you use.
3 carton sales revenue to TAAT is ~$60, not the $120 you use.

Therefore, per year $60 X 7000 = $420,000 (not the $840,000 you use)

At three cartons per month the number becomes $420,000 X 12 = $5,020,000 per year

At three cartons per week per outlet, this becomes $420,000 X 52 = $21,840,000 per year.

It's only when you work the numbers for the e-commerce site that you get to use the full retail sales revenues as accruing to TAAT.

Rather than $90,000,000 per month, the addition of your assumed e-commerce sales to retail sales might yield perhaps $65,000,000 per year for Ohio plus e-commerce.  That assumes TAAT has the production capacity to support those sales and that the sales have reached your assumed steady-state rate.

Fix your numbers, then run your blue sky estimates to get a better estimate, though I would not expect all 7000 retail outlets to perform at the same level for the first few months, if ever; e.g., at the outlet I visited last week I still was able to buy one and get one free (BOGO).  

Regards,
tdon1229

 

Listen, we have no idea to what prices TAAT sells to the wholesalers and distributors or to the key retail accounts and also to the individual stores directly. The deal with all these might be different from the ADCO deal. We simply don't know. 

 

My guess is around 30% which would mean that around 28USD per carton goes to TAAT. 

 

Besides, in some of the other US states in the near future the margins might be even better. Might be between 28-40 USD to TAAT. 

 

My point was simply to show that TAAT doesn't need that much sales in order to have hundreds of millions in sales and to have a billion dollar valuation. 

 

Some of these 7000 stores will sell a lot of TAATs and others will sell just a few.