let's agree to disagree then....I've beeen too involved with these small industrials to think otherwise.
I hope you are right as I am a greedy dude!
ps never saw "unreal" cash. cash is cash!
Companies that are purchased for cash are never purchased based upon a level of companies sales. This measurement was derived durnig the dot.com era in which companies with no profits were purchased by other companies with no profits paid by shares of inflated stocks. In other words, it was one big ponzi scheme. These days, real companies are bought with real cash and valuations are based upon real profitability ....not book value or sales.
I share your same assessment... At your $16-17 MM e's forward looking analysys, if you give this company a cheap 10 multiple for a company growing at a medium rate, then we are talking of about $170MM Market cap or about a 3 bagger from hear. If there are any upside surprises or the market recovers faster than expected, then we are talking about a much higher number. $15-20/share is just about a lock for this company this year unless the markets collapse... IMO
good analysis and appreciate your posting it.
In turn let me run a much simpler one by you and any other lookie lou's.
Quite a few of these smaller industrial commpanies sell for at least one times sales. Now that leaves us with a very nice cap gain doesn't it?
Enjoy the ride! See you at the top.
For Q4 I assume revenues will be about $25M making the total year 2010 revenues of about $85M. Assuming 20% organic growth and about $20M additional from the recent acquisition, I get 2011 revenues of about $122M. Assuming EBITDA margins of 13-14% I get EBITDA of $16-$17M. Regals last acquisition was valued at 8.75 trailing EBITDA. Assuming about 8.3M shares and zero cash/debt, I get a value of $17 - $18 per share at the end of 2011. I suggest Regal work on integrating its current deal. By the time they are done, AMOT will be worth a good look.