iinet's fundamentals strong- it is cheap

IINet will most probably announce a result that will surprise the market in its first half 2010 results

The analysts are forecasting around 21 cents for the full year

I would not be surprised if the company declared 12 cents profit for the first half with a dividend of at least 5 cents fully franked

Remember IINet is tracking currently on 500 million dollars turnover and has a market cap at today's price of 322 million dollars

I believe it is currently trading at a maximum of 9x earnings

If you divide the market cap of IINet by its turnover, you get a ratio of 0.644

However if you do the same for telstra the ratio is 1.65

Based on this aberration surely the price of IINet should be at least $5.00

Bear in mind the payout ratio was appositely 47 percent for IINet and 92 percent for telstra

IINet are innovative and growth orientated without the issues or problems of other Internet service providers

Some time in the next week or so the share price will spike and the results that Michael Malone's company release to the market will confirm this movement

When IINet successfully defended the litigation from the movie studios against themselves and the court awarded costs to the company of 4 miilion dollars, I considered this a fantastic opportunity to buy

So I did

As always the above comments should not be construed as investment advice