Wednesday, June 27, 2007

HIHO and CAGC update and help out

Good morning,

It looks like HIHO will probably announce their earnings before the bell tomorrow Thursday June 28th. It will be interesting to see how their results are.

Here are my GUESSES. What they could do for the year. $32 million in revenue. .35 EPS and roughly 4 million shares.

Assuming my guesses are correct.....(which they may not be)
At $5 per share the company would have a market cap of $20 million. So the prices to sales ratio would be about .63 so under 1 to 1 price to sales.
It would be trading at just over 14x P/E ratio.
And have about a 1.42 Price to book ratio.

They should also announce next week a dividend of .16 which is a 3% return on a $5 stock.

They did $26 million in revenue last year and earned .01. They should do $32 million (my guess) and earn .35 (my guess) this year. That is over a 23% growth rate for the year.
That growth rate doesn't reflect the 2 businesses they bought during the year one of which was purchased very late and had no impact on the growth.

I could for see them having $50 million+ in revenue in 2 years if they continue to grow strong.
I currently own it and am looking for a $5 stock after earnings and dividend announcements. If the earnings are bad or the dividend doesn't happen this stock will go down. I may exit the stock if it moves up quickly I don't know yet. But I will post it on this blog whatever I do.

CAGC has been moving up nicely on good volume the last week or two. Up to $3.70 yesterday. (Original post price was $2.90 on April 9th blog) The company has said in a news release a few weeks back it expects to earn .43-.45 for the year (based on current # of outstanding shares) If that is the case at 10x PE its a $4.30-$4.50 stock. At 15x PE its a $6.50+ stock. I think they can do a little better then that. And for the next couple years I see some great growth from them. They are projecting that the revenues will grow 50-60% for this year. A good stock to own longer term 6-24 months+.

CAGC is a stock that reminds me of TBSI which we covered back in May 2006 in the $5's had a cheap P/E and growing. Now TBSI is $27+ in just over a year! I don't know that CAGC will run like TBSI did but I think CAGC is a good stock to own without a lot of downside.

Have a good day and I should have an update on HIHO tomorrow assuming they come out with earnings before the bell tomorrow.

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Have a great day
Steve Hoven

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