onthenose,Some further info on DWS which I hope you find...

onthenose,

Some further info on DWS which I hope you find useful:

The prospectus forecast EBIT of $11.09m or NPAT of around $7.7m for 2006 on revenue of $42m.

2007 was forecast to come in at $11m NPAT.

The current market cap is $197.5m which means DWS is trading on a PE ratio of 17 times forecast 2007 earnings.

Compare that to their major competitor Oakton who trades at 22 times earnings.

The actual 2006 result came in at $7.75m NPAT however revenue was much higher at $45.46m. This resulted in the NPAT margin falling to 17% from a forecast 18.33%.

Based on the large increase in revenue from the prospectus forecast to actual result I think we can reasonably expect revenue to be much higher than forecast for the 2007 year.

I would revenue to be around $55m to $60m for 2007. Now lets take their forecast NPAT margin of 22%($11m divided by $49m) for 2007.

As revenue was higher in 2006 but the margin lower by 1%, lets be conservative and forecast an NPAT margin of 21%.

Forecast 2007 NPAT:

Revenue of $55m - $11.5m
Revenue of $60m - $12.6m

Valuing DWS at a PE similar to Oakton of 20 times earnings gives them a forecast market cap of $230m to $252m or $1.74 to $1.91.

Curent share price - $1.50

Please do your own research, I am not a financial advisor.