Seems to me that the current share price does not match the forecast of a $12 million ebit
If the forecast is in fact correct the market cap should be more like a multiple of 6-7 less debt of the EBIT ( $72m-18m= $54m )
If that is a reasonable value the fall should of been more like a drop from $2.50 to around $ 1.00-1.20 per share , the fact that AMP and Pie sold out in a rush or herd mentality arguably this has created a significant oversold position.
If shorts added to this I agree we will see a bounce back towards $1.00
If they downgrade again towards $ 6 million the current market looks about right , but the credibility would be shot .
In my view it really is a toss of the coin , but I really would be surprised if the directors would of over promised on this occasion so decided to buy in at 50 cents or a 2-3 ebit multiple
If it is correct surely a MND or private equity player would attempt to take them out
AUG Price at posting:
52.0¢ Sentiment: None Disclosure: Unspecified
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