Here are some numbers worked out for the numerically challenged:
$54 billion lost annually to farmers due to bovine mastitis, and loss per cow is about $200 per annum. That works out to 270,000,000 animals suffering from bovine mastitis each year. If this drench could be marketed at a cost of say $20 per treatment (a bargain compared to the loss) and is used on 50,000,000 animals (about a 20% market penetration) that generates revenue at the retail level of $1 billion, of which at least $150 million will flow to POH.
A price per treatment of more than $20, greater market penetration, or a higher than 15% royalty would improve these numbers.
But using $150 million, and assuming this is a ROYALTY and I don't need to subtract costs of production, this translates to earnings of at least 18 cents a share: say 15 cents. PE ratio of 20:1, share price impact of just this product over time $3 per share.
Smoke on that, naysayers!
POH Price at posting:
11.5¢ Sentiment: Buy Disclosure: Held
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