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  • mastered009 mastered009 Aug 25, 2004 8:47 PM Flag



    1) With a market cap of $15 million, what's the downside?
    2) cash is not an issue - just turned cash positive, now making money, and adding contracts, raised capital at higher levels;
    3) After years of floundering around, suddenly they find themselves in not one but two sweet spots of american industry, and the bioterrorism testing business is about to explode -
    4) This business has huge operating leverage as it turns profitable - an additional $10 million of revenue will add $1.20 per share of earnings. How hard is that going to be, with contract bids totalling in excess of $100 million?
    5) This is compelling takeover asset for anyone interested in entering the bioterrorism testing game - CBTE has one of only 8 labs in the country approved by the DoD.
    6) techincally, this is a fast shot to $6 - if it breaks out of that resistance, the neasurements are explosive 13 then 25. Hard to imagine that with another contract or two - and they are waiting on several, i hear, or with another anthrax letter anywhere in the world, this wont pop 6 in the next 30 days.
    7) 3 quarters of new business - what will happen to earnings over the next 2 quarters - sequential momentum is about to pop.
    8) Tiny 1.8 MM share float
    9) $6.9 MM in new contracts so far this year and more expected. Project bioshield could provide CBTE contracts of much higher magnitude.
    10) Terror and security stocks soaring today- momentum will continue due to security concerns with republican Convention.
    11) over 100,000 shares short- short covering.
    12) Markets have turned around as oil price has peaked and is falling.

    13)At $25, this is still only a $40 million market cap company. Based on meetings with management, one poster believes with the momentum of the business, they have visibility on $20-30 million of revenue over the next 18 months. Remember, $10 million of revenue = $1.20 per share.

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    • well said. Any thoughts of your own to add? ;-)

    • I'm long, but I don't get the EPS leverage you reference. I would estimate $10 mil. in revenue would yield about $0.15 in EPS, assuming normal government contract margins. Please explain how they would achieve net margins of nearly 40% on a $10 million win.

      • 1 Reply to fastprophet4u
      • If I remember corectly when they got the contracts earlier in the year, CEO stated that they don't need to hire new people to execute them ... so I guess, except for the cost of the material, plenty will go to the bottom line. If they come up with 250+ K next qtr. and a bit more subsequently that's good. I don't expect more than ~ 1.2-1.5 mm altogether a year from now (which would make me happy) on the basis of the existing contracts. The new contract are likely IMO, but I'd like to hear about them first...

        PS. -- nice move on a nice volume today, if the trend continues tomorrow, the traders will take notice IMO.


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