sp likely to soar over next few months, page-2

SP slowly creeping up on the basis of careful accumulation. For those new to BSA, stock was sold off massively in early September 07 because the market thought that most of FY09 revenue was going to come from the telstra contract, and without the telstra contract the sky would fall in. This is false. Organic growth in BSA's other business segments (plus Triple M) will mean that the loss of the telstra contract will merely flatten earnings in 09, but nothing more. And if some of the predicted subcontracting work eventuates in relation to Telstra, then FY09 could actually see fairly healthy earnings growth. In any event, by FY10, there is no reason why BSA cannot continue its historical earnings growth trajectory.

I'm looking forward to the AGM on November 26 where I'd expect the CEO to be in a position to give some more guidance.

FY08 guidance currently stands at $12mill NPAT. If the market comes to believe what I have stated above, viz., that FY09 merely looks like being flat (i.e., in the region of $12-13mill), then I think the market will quickly re-rate BSA to an earnings multiple of around 14-15. Current FY08 earnings multiple is only around 7.5, so there is heaps of upside potential.

Certainly upside risk strongly outweighs downside risk at current prices.