@aks4058 not sure if this might help. figure its worth laying...

@aks4058

not sure if this might help. figure its worth laying out for those who arent familiar. pls ignore if you know it

company valuations are made of 3 parts generally speaking
- asset base + listed vehicle + contract rights + ip etc
- future cashflow value
- cash and cash equivalents

thats why when i talk about BUD or other stock values i tend to talk about EV - enterprise value - which tends to be the measure used to compare one stock to another

EV = market cap (ie equity value) + debt + minority interests (holdings in other companies) - cash and cash equivalents

the market moves in and out on optimism pessimism about future cashflows on stocks and sectors all the time - which is 'momentum' - thats the main part of why BUD is now 18.5c

the small cap tech sector went on a major momentum bull run 2h last year - eg bud got to 41c, big to $5+, knm to 16c

now bud is 18.5c, big $2.22 and knm 9.5c - all reflecting sophisticated money selling into the tops to retailers so they can buy back into the lows once they felt momentum had overshot 'reasonable' bounds

this happens all the time - big money gets set in sectors that are seen as cheap - pushes them up - cashes out - and rotates to the next sector. chicken and egg as to whether big money follows the trends or creates them - i tend to think its the latter mostly - but no market participant can determine all economic and other trends that set the stage for momentum.

typically they dont rotate back to a sector for at least 6 months - they want retailers to capitulate - sell v cheap - before they re-run the process. just have a look at gold stocks right now - 50-30% of the value they were when gold price was around same levels in 2015

stock specifics always play a part in determining how each stock holds up in the selloff - the really good stories will still be held to a higher degree - just not as much as retailers tend to think

re momentum - thats why i said last year in a bull run 30-50x price to sales is reasonably common for high growth small tech in a bull market - but then contracts to 10-15x when the market goes cold - can be lower if theres something really chilling markets like a big correction

you always need to bear in mind only tech gets the p/s ratio largesse - and only because such a high % of sales goes straight to revenues and because they generally have v large scalability with small increase in marginal costs

thats why globally saleable solutions tend to get better multiples than country specific ones

the big challenge with BUD and other small caps is p/s isnt known because sales are unknown - so everything has to be discounted for the risk

thats why State One reduced its risk dicount on BUD despite lower revenue expectations now BUD's shifted to the wholesole distributor route - they think there's less risk of hitting the numbers 6 months along - but numbers will be lower than theyd assumed under BUD direct distribution

that kind of adjustment happens for every stock though as it goes along - analysts simply cant know what pathway a business will take when its so formative

anyway - may not be of interest - but thought it may be of help to some at least