Traderfan: ckgt.ob: 50 cents forward EPS

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=47356869

Posted by: Traderfan Date: Wednesday, March 03, 2010 6:29:17 PM
In reply to: pappy who wrote msg# 1444 Post # of 1446

Well yeah that's always possible that they are just conservative. But for now let's go with the known guidance since this is all we have.

I give you my numbers and you tell me where you disagree or whatever.


In Q3 they had 36% profit margins which wasn't the real margin due to this "provision thing of almost 500k".

So they actually had 30% profit margin in Q3.

So given their guidance they will come in with lower revenue in Q4 than in Q3. How that is possible with 2 ADDITIONAL products in Q4 (even if they only came in late in Q4) is a complete mystery to me. I mean nobody expected this. That means that their existing busines went DOWN sequentially.

So let's take the Q3 profit margin of 30% and take 7.8 million in sales (a bit lower than in Q3) and you get 2.34 million in net profit.

Let's also assume they still have these 19 million shares as their FD figure because the warrants were not converted in Q4. That would bring in around 12.3 cents in EPS but let's be nice and say they will come in with 13 cents.

Now what you got is sequential decrease in sales AND in EPS, due to the provision in Q3 (otherwise it would have been a flat EPS number) but you know the sheeps out there won't realize this they will first sell and then think after the earnings release. So much for that.

For 2009 that will bring us to your 40 cents in EPS. That number is ok overall I think. Like I said I at least expected 42-43 cents but 40 is ok. But make no mistake this isn't a FD 40 cents.

Now for 2010. Just take the numbers from above and see what you get. 35 million in sales with a 30% profit margin will be 10.5 million in net income but in 2010 you will have at least 23 million shares (I think even a bit more) so if you think about EPS we are at 45.6 cents and let's say they can grow their margins further they do 50 cents. That's another 10% margin increase.

There you have it. They are miles away from 70 cents for 2010 with this guidance. Heck I thought half of these 35 million in 2010 will be the cigs alone. It also seems that any new products are on hold otherwise why guide so low if you know that you introduce another 2 new products soon? Makes absolutely no sense.

The bad thing here is that you don't even have the uplisting catalyst in the near future like you have at BSPM at least. Now is 50 cents forward EPS enough to buy the stock at 2.50 or 2.30 or 2? Well that's another question.


TF