re: getting smashed today ..down 20%

I know - it's horrible!

I seem to have a knack for picking these at the WORST of times...

There is an AFR article out today that makes the supposition that the revenue revision for 06 was behind the withdrawal of bids that were supposedly around 1.8 and 2 dollars. Now at 1.1 dollars. I was previously expecting a price of between 1.8 and 2 dollars by the time of the annual this year. Now... alas...

It's interesting to look at how the market has revalued the company. There is a lot of big money moving around.

At a price of 1.65 and a projected earnings matching 05, it was valued at an earnings of about 11.6 times. I thought at the time that this was a reasonable valuation - even pessimistic... but things began to slip on the basis of the rumours concerning C.o.o.ney's (edited because HC thinks the word is profane) ability to sell his share.

With a drop of near 30 percent in price how do things stand? Well - we have to do a few guesses. They are now projecting revenue to be at between 85 and 90 percent of last years total... i.e. between 80 and 85 million approx. Assuming margins are maintained at 22 percent, then going through the sums the market at 1.1 is valuing TCI at between 9.7 and 9.2 times earnings.

This would represent definite over-selling on the part of the market - particularly if the claim is true that this is just revenue slippage and not revenue loss.

To keep parity with the previous p/e, a drop to around 1.3 dollars seems more reasonable.

At a price of 1.1 - it looks very cheap to me...