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China Armco Metals, Inc. Common Message Board

  • dean.smith07 dean.smith07 Apr 21, 2010 6:01 PM Flag

    New Numbers!

    New share count is 14,147,744 once all warrants and private placement announced today are closed. CNAM will receive $22MM in proceeds. Based on this share count and the Company's projection of $12MM in Net Income for 2010, we are looking at a P/E of 7.3 assuming today's closing price of 6.17/share. The good news, at this share count, we are trading for only 2x book value. Much better than the 6-7x book we were trading at a few weeks ago.

    CNAM has 1,223,022 in outstanding warrants and 1,538,464 options with the private placement today. Collectively, CNAM will see an additional $17.6MM in proceeds based on their exercise prices some time in the immediate future.

    Together, CNAM has substantially diluted shareholders; however, have secured over $39.3MM in proceeds from equity offerings. In addition, they have $40MM in commitments with their banking relationships.

    Realize that the Company is projecting it's 'current' facility to produce up to $400MM in revenue. Conservatively, I believe we could see up to 8% in net margins associated from this facility.

    We are way oversold, this Company is in a great financial position to hit its projections and satisfy its contracts in the pipeline. They've already announced $100MM contract in 2010. Management anticipates this facility to be "reach full capacity" by 4Q10. Obviously to do that, we need additional contacts.

    I'm bullish on the partnership with TCG. TCG's founder served as director with the U.S. SEC for over 6 years.

    Strong Buy

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