re: for defabster Hi AngusAt 11c the market cap of TOX was...

re: for defabster Hi Angus

At 11c the market cap of TOX was $57million. The company had made $3.4m EBITDA to the end of March 2006. Nearly $1.4m was made for the March quarter. Assuming further synergies are realised during the June quarter from the Delvex acquiistion and TOX continues to grow at a similar rate as it has for the last year, one would expect EBITDA to be around the $5m EBITDA mark which gives a pe rato of approx 11.

THe directors forecast EBITDA of $4.3million in Jan. I believe the directors in the interests of strengthening investor confidence in TOX should announce that EBITDA will exceed $4.3million. It will be fairly close to $5m. Given there will most likely be a variance of greater than 10% between forecasted and actual and hence material, I think the directors have a duty anyway to announce a profit upgrade.

I suppose I was using EBITDA in my calculation of the PE ratio. THis is probably slightly inaccurate as NPAT should probably be used instead. In any case, I think it is fairly obvious that the company is trading at a ridiculous valuation at present.

Although the mkt depth is very ordinary, fundamentally speaking, there surely could not be any more downside in this one. I dont understand why people are capping the sell side. Pointless really having a sell order at 15c now. It is very frustrating and does put people off TOX when they see the depth. I just wish the market would just let TOX run.

Cheers