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+--- Thread: Ten reasons why this is a great buy (/showthread.php?tid=12356)
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RE: Ten reasons why this is a great buy - admin - 05-21-2019
(05-21-2019, 12:03 AM)philipcarl3 Wrote: $TUEM's sales forecast is highly predictable due to their contract announcements ($1.08B backlog) & structure (15% rev 1st yr, 35% 2nd yr, 50% 3rd yr)
2019
Q2: $35.31M
Q3: $43.04M
Q4: $57.74M
2019 total: $159.13M
2020 total: $324.81M (+additional contracts yet to be announced in '19 & 1st half of '20)
2021 total: $467.45M (+additional contracts yet to be announced in '19,'20 & 1st half '21)
Sales estimates are based on 100% contract conversion. Actual total will go ?or ? depending on actual conversion % &will increase w/ additional contracts as time goes by.
Mgmt guided 80% conversion if I recall correctly, but they have been converting 100%+.
$467.45M sales X 6 P/S=$2.8B mkt cap=$24 share price
That P/S ratio could go up to 10-12 if mgmt reports strong growth as predicted from their announced contracts.
10 P/S on '21 sales=$4.67B mkt cap =$40+ share price.
12 P/S=$5.6B mkt cap=$49 share price.
Disclosure: I own 110,700 shares.
(Thanks to @Mrebs for contract sales estimates)
I hope you got some other stuff in portfolio, Philip, I'm not sure this is a stock to bet the bank on, IMHO.
RE: Ten reasons why this is a great buy - philipcarl3 - 05-22-2019
You should focus more on doing thorough research and less on the portfolio of others.
RE: Ten reasons why this is a great buy - admin - 05-22-2019
(05-22-2019, 05:46 AM)philipcarl3 Wrote: You should focus more on doing thorough research and less on the portfolio of others.
This isn't without risk, I would say even considerable risk, Philip. If I speak out it's because I'm worried about people like you, nothing else as SHU only has a small stake with a low cost base.
I really hope you have other stuff in portfolio and are not leveraged to the hilt. The short count increased to 17M, almost double from just a couple of months ago. Clearly some people think not all is well here, and they're putting serious money on it. Are you absolutely convinced you know more than they do?
Now, they might be wrong, I might be wrong. But when I see calculations like you did here above I fear that the prospect of imminent riches might lead to taking on too much risk, by not diversifying or not considering any counter arguments.
Conversion rates are no longer 100% and they are coming down, although not anywhere near with the speed that Hendrik Alex suggests, but it's coming down nevertheless.
I'm not having a go at you, but I feel compelled to speak out as I've seen quite a few people bet the bank on small companies and getting destroyed in the process.
Whether you like it or not, this is a controversial company and although too much is being made of that (IMHO), it's not entirely conjured up. I would advice anyone against betting the bank on such companies.
Just my 2ct.
RE: Ten reasons why this is a great buy - philipcarl3 - 05-22-2019
Thanks for your 2 cents but you didn't say anything new to me. I have been investing for 30+ years. Had some bad years, had many good years. Learned alot about markets and market psychology along the way. Seen it all. Started with nothing and built a fortune. I didn't get to where I am by not being shrewd. But I will check back here periodically to see if anyone has anything worthy to contribute. So far, not much. But I keep hoping.
RE: Ten reasons why this is a great buy - admin - 05-22-2019
Well, I specifically asked you a question, which I'll repeat. Are you 100% confident you know this investment better than those who keep piling on on the short side, now standing at 17M and counting?
I'll tell you this. I was seriously pondering buying back the half position we sold for the SHU portfolio. Then I noticed the 2-week rapport increase in the short position from 14M to 17M and I asked myself that very same question and I can't answer it anything close to 100%.
You really have to know the company inside out to be able to answer that positively. And even that's not fool proof, I've seen situation in which management was simply BS-ing investors privately, who gained a great deal of confidence from private conversations that turned out to be build on quicksand.
Don't get me wrong, I'm not saying Pareteum is like that but I can't rule it out entirely either.
Unless you have seen the majority of their contracts, quite frankly I don't see how you can be so sure.
For me its a reasonable bet, but not one to bet the bank on, and I am under the impression that's what you're doing. Could very well work out, I'm not saying that it can't, but for me there are simply a few unknowns that I fear others actually do know, I can't rule out that the shorts know more than me, but I sure hope you can..
In any case, good luck. If it pays off like you calculated, I'll be the first to congratulate you.