Hi BazTokyo. Every time OBJ has risen over the years, OBJ has been rife with short-term traders very optimistically trying to self-fulfill their exit targets and posting accordingly. Recently again we also see those who buy ferociously on market for short bursts; and then completely ignore the stock to watch it drift significantly on low volumes. There are still plenty of agendas around and that pretty much sums up the ASX of today and interest in stocks that demonstrate future potential.
But what will happen to OBJ's share-price once revenues, EBITDA & Net Profits start to show their heads? Recently, I read an article about a company that is scheduled to list on the ASX on July 4th this year. Will there be July 4th fireworks? We will just have to wait and see, but what is remarkable about this company in comparison to OBJ, is that this company reported $400,000 Net Profits for 2016 from $200 million in Revenues and has been afforded a market capialisation of approximately $170 mil. They are forecasting EBITDA to reach $6.9 mil in 2017 & Net Profits to rise six-fold in 2017 to $2,500,000. from Revenues of $241 mil.
'Mr Kogan, who will be entitled to sell part of his stake 14 months after the $50 million initial public offer, is expecting earnings before interest tax depreciation and amortisation to jump 138 per cent to $6.9 million in 2017 and net profits to rise sixfold to $2.5 million, from $400,000 in 2016.
According to a pathfinder prospectus sent to prospective investors last week, revenues are forecast to rise 19.9 per cent to $241 million in 2017 and gross margins to widen from 14.5 per cent to 15.2 per cent'
The above starts to really get the cogs in my brain working overtime. On a quarter of a billion in revenue, this company is only expecting to forecast profits of $2.5 mil for 2017. Margins for this type of business are extremely tight as highlighted by the above and based on the 2016 results on $200 mil Revenue, they only made a $400K Net Profit.
Enter OBJ, with a very unique Business Model where partner collaborations are fully funded, current outgoings are $180K per month with over $8 million cash available and no debt, High value-High Royalty...low-outlay In-house Product Development, opportunity to earn Licensing Fees/robust Royalties/Upfront Payments/Milestones, extended IP Protection, Multi-Global Blockbuster Products/Brands; with Revenue to Net Profit Margins getting set to dazzle Mr Market.
Imo, it is not too hard to see why we are now witnessing these bursts of buying pressure again, where the VWAP for the day has been higher than the closing price and subsequent day's closing prices are down on significantly lower volumes. Glyn & Jeff both mentioned a few times at the Roadshow that OBJ are now at the 'Business' end of town - the final Launch Phase 3 of the Business Plan where OBJ's incorporated technology will improve the product’s performances' by between 3 to 10 times after 10+ years of R&D & Product Development. So imo, I can't imagine that we will all have to wait too much longer for P&G to start the beginning of OBJ's ASX re-rate and then hand the baton on to other Global giants to continue the re-rate (Olympic pun intended). When P&G go Global with Magneto enhanced products, they will be taking OBJ with them and finally paying OBJ for the privilege. We are already starting to see Industry published articles that you still need to subscribe and buy, that clearly outline and confirm to the world the direction that P&G are taking their Billion Dollar Brands; and the rest of OBJ's collaborating Partners (existing & new) are sitting up and taking notice.
After 10+ years, we now await the Revenues that will no doubt imo be magnetically super-charged and enhanced with incredible margins from Revenue to Net Profit as compared to new ASX entrants.
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