still the cheapest stock on asx. pe ratio of 3!, page-7

I think it is a good turn around story but to attempt bring a little reality into the picture -

"They are NOW currently making approx. 300k a month profit = 3.6 million a year
This is expected to increase to 400k a month soon = 4.8 million profit."

When I look through each monthly cashflow statement for the last 6 months I get -

June cashflow +466
May cashflow +196
April cashflow +141
Mar cashflow +156
Feb cashflow -171
Jan cashflow +105

so the trend is good although Jun has some previous months receipts in I believe. Even if we say the are up to averaging $200k per month of cashflow now and don't take into account any depreciation or amortisation that gives you a best case of NPBT of $2.4m - then you pay tax (eventually) if you want to compare PE ratio's so call it NPAT of $1.6m

Given the options are now in the money you should work out the PE using the diluted amount of shares or approx 500m shares so current mkt cap is nearly $20m & therefore trading on a current PE of about 13x NPAT.

I too expect earnings growth and think they can reach NPAT of about $2.5m without expandig but after that there will be a lot of investment needed and management will start charging their services correctly so max sustainable NPAT in its current form is about 2-2.5m giving a PE of around 10-12x - still cheap given its prospects.

"Now with upgrades this figure could be up to 2 times that."

I agree this is possible but it's ahrd to estimate how much the cost per ton will drop when the excess capacity comes on line - prob can only reach about 3.5-4m NPAT bearing in mind they have to spend about $1.5m to get the excess capacity online.

"If you don't believe me ask management.
(who might i say are very conservative in there profit guidance) look at last half year. Expecting to make 700k profit, and they made twice that! which other company has done that? and is trading at such a cheap price???"

Yes but how did they do it? If their cashflow for the 6 months adds up to $897k (better check this - I can't be bothered) then it's a bit of hocus pocus like revaluing the tank cleaning business back up or something like that. I haven't bothered checking all these last details so don't be too scathing with me on your reply - just be careful - they easy money has been made here - I think it could get to 7-8c but I suspect it could take much longer than many have patience for here on HC.