Well when I first went in I had a target of $1.00 that was end 2012. I see no reason to change that. My reasoning was that consolidation is needed in this industry and that I expect management to be able to end up with at least a $100 million market cap @$1.00 per share. I expected them to buy on around a 4/5 pe and to get that to a 20pe when the market saw that could find those targets.
The huge risk for me was whether management could manage the acquisitions. That was huge for me becuase it takes a special group of people that can activate a support process that supports the business rather than complicates it. I also found that they had SAP as a backoffice product - at first that worried me because SAP is a little complicated and it can drive the business rather than support it.
I became much more relaxed after I could see from the results that they have the ability to integrate the acquisitions and it seems from the commentaries add information which adds value .
So with one hiccup early on they seem to have got on track and if they keep a disciplined approach they could be there ( $1.00) in around 24 months.
That is the current thesis for me.
PGC Price at posting:
47.0¢ Sentiment: None Disclosure: Held
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