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Magal Security Systems (MAGS) Message Board

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  • sahmdars sahmdars Mar 17, 2004 11:15 PM Flag

    I have shorted alot of stocks

    Thanks for your answer to my question. Here are my observations:

    "can try to catch it at or near the high and buy it back at the low"..... If you can consistantly pick the high and the low intraday, what are you doing here? you must be a Billioner!

    Shorting a thin stock in a strong group with high potential products is extremely risky, if the potential "inevitable" happens and the stock pops you may pay a very high price for your approach.IMHO. I wish you the best.

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    • Here are some comments on MAGS valuation:

      7.9 MM shares outstanding
      Revenue Growth Rate for the last 9 months: 41%
      Total Revenue : Almost 60MM

      Current price :Aprox. $11 per share

      Market Cap. Approx. 88MM

      88 MM Divided by 60MM = 1.47 So the whole company is valued less than 1.5 X Revenue

      Look at many high tech stocks with comparable growth rate and you will see market capitalization of 3, 5, or even 8 or more times revenue. Now at only 3 times CURRENT revenues the market cap. will be the 3X60= 180MM. Divide 180 MM by 7.9 MM shares outstanding you will get 22.78 per share! This can even be conservative considering that Revenues are growing sharply. Now, a case can be made that MAGS is undervalued by a wide margin. (all IMHO, I am long MAGS, do your own DD).

 
MAGS
4.76-0.01(-0.21%)May 1 3:59 PMEDT