There is no question that we have seen a reversal
Post# of 7769
Posted On: 11/05/2014 6:22:04 PM
There is no question that we have seen a reversal of the downtrend that has started in early July 2013. Just as the House and Senate aligned last night, the same is just now starting to happen with the vastly improved fundamentals and the longterm technicals trend. We have waited for what feels like an eternity for this to happen, and it's finally started.
I read somewhere that there was a gap to be filled above $.18. I didn't see any gaps up or down, but I could be missing it. Even so, while I expect some red days ahead, outside of some cataclysmic event, a slow and steady ascent will continue. Considering the annual run rate of $67 million, from which 10% falls to the bottom line in the form of positive earnings, and allowing for the O/S to increase to 150 million shares would yield an eps of $.0446. At a 20 PE, the stock price would be $.89. And everyone in this industry knows the PE ratios for high growth rate stocks can well exceed 20 and even above 100. Just go read some of the Investor Business Daily publications. Of course, we would have to reduce this number to present value, for which there are many opinions and formulas. But at the end of the day, my analysis leads me to believe we have much more room to run, much more.
Another analysis tool folks use to value a company is based on annual revenues. There are many companies market caps higher than twice their annual revenues. Again, considering at most 140-150 O/S, double our annual revenues just on the compounding business alone would be $134,000,000. So again, we arrive at $.89.
To that end, either way you slice it, SCRC is significantly undervalued. So as nice as this reversal is today, we have much more altitude to climb before we have complete alignment with the fundamentals and technicals (or another way to put it, between the fundamentals and the stock price). as always Go SCRC!! Tut and that guy in the sky....
I read somewhere that there was a gap to be filled above $.18. I didn't see any gaps up or down, but I could be missing it. Even so, while I expect some red days ahead, outside of some cataclysmic event, a slow and steady ascent will continue. Considering the annual run rate of $67 million, from which 10% falls to the bottom line in the form of positive earnings, and allowing for the O/S to increase to 150 million shares would yield an eps of $.0446. At a 20 PE, the stock price would be $.89. And everyone in this industry knows the PE ratios for high growth rate stocks can well exceed 20 and even above 100. Just go read some of the Investor Business Daily publications. Of course, we would have to reduce this number to present value, for which there are many opinions and formulas. But at the end of the day, my analysis leads me to believe we have much more room to run, much more.
Another analysis tool folks use to value a company is based on annual revenues. There are many companies market caps higher than twice their annual revenues. Again, considering at most 140-150 O/S, double our annual revenues just on the compounding business alone would be $134,000,000. So again, we arrive at $.89.
To that end, either way you slice it, SCRC is significantly undervalued. So as nice as this reversal is today, we have much more altitude to climb before we have complete alignment with the fundamentals and technicals (or another way to put it, between the fundamentals and the stock price). as always Go SCRC!! Tut and that guy in the sky....
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