ite (ITE) Hi Danlupi,Great post.Think with both Emitch(EMI) and...

ite (ITE)

Hi Danlupi,

Great post.

Think with both Emitch(EMI) and it&e (ITE) in your case study--to which you refer,....you mean NPAT--not ebita....

Buit what is GOOD here actually revise that--what is brilliant here Danlupi, is that youa re looking the way markets look--that is Forwards.... and nopt backwards...

Back to the numbers....

Danlupi, You have suggested a rather Wide & broad scale--1-7 millions-- Danlupi-- which will have a huge effect ....on the multiple.....

So let me suggest a number which I reckon is fair....

NPAT of $5 millions.

Okay let's back that back to even back to only $4.5 millions....NPAT....for a future predicted (ITE)_ NPAT....

Emitch(EMI) for reasons of monopolisitic tendencies and characteristiics---underwriting the future earnings -- vis a vis theie (EMI) supremacy in a very lucrative supply chain distribution channel--Media Buying vioer the Internet--- were and are rated on a current historical PE of: approx.... 90.

That is obviously not what they(EMI) are really..." rated on" ...their is an implied Market Consensus view factored in with Emitch-- with their FUTURE earnnigs....

(This by the way is related to my riddle in prevous post).....!!!!

Okay if Emitch had a 2.3 millions NPAt--what is 90 times that figure...??-- and there you have.... the current Emitch market cap....!!

Back to (ITE).

Let's not agree to give then a PE of 90...like emitch at this stage.

Arguably;-- (and a good argument at that... imo !!)-- Too high....

Whaty about we plug in a PE of less than half....??Say 40....

What are 40 times 4.5 equal to....About 180 millions is about the number....?

So on that hypothetical assumed number---90 cents is the number....(with NO takeover premium !!).....

However, remember the riddle....?

....Awwww .....shucks.......

Well, being.....in a good mood after a few crownies; so will do..... the 'ol .....abracadbra ..... Ali Baba-- and reveal the Pub's..." Secret Tunnel-- Open Sesame"-- mystery thought lines......

Okay remember one of the HC.... posters --was it Darth Vader...???--hmmmm.... was it Gollum, --??-- hmmmm..... cannot now quite remember the H/Copper call sign...??-- who rang Oliver Carton and what he said that Mr Carton said....???

Anyways it was significant for this reason...

....Concentrate....

....Not harder enough...

....Concentrate harder......

....That's better....!!...

Okay, think about this....

If (ITE) come out now and reveal 2-3-4 new Contracts--as they had indicated -- from the previous Short Lists from the November announcements....

and then add a new up Dated Pipe Line...with say a further 4-5 new Short listed Contracts--ie: clients that have moved and jiggled their way-- through and up; the (ITE)-- Sales Pipe Line--and wiggled along to be now on...and at..... the Proof of Concept Short list Legal Negoitiation stage--like last time....

The $64 dollar .....Robbo's Riddle valuation question--is.... (drum roll please ...AA)....??

-- What--yes, precisely What...???-- -- (think laterally now !!)-- is the Big Difference ...??-- this time ...??-- from the Short List --Proof of Concept Stage and Short List Stage from..... last time....?????

- Answer is:

Believability Factor.... by the Market.... after they(The Market)-- digests it ....which... did... not ...npy....happen last time.

Here the parallel with Emitch is relevant.

These days when emitch says something about the futue--the amrket belevies them by and alrge--and factors it into future valuation.

Back in Year 2005 this was not the case...!!

Could you please; Spell out this crap ....please Robbo ...???

errr......okay then......

The market will take the increased Sales Pipeline--at $5-6 millions a pop per contract--and take the stated Short list--much more at real face value--and accord a Top line Revenue figure--which previously they avhe not--which is why the current share price has not yet --yet...!! .... gone up!!

....>>-- ie: Being on short List--Proof of Concept--agreed in spirit but not ink dry on contract is currently NOT good enough for the market.

Obviously so. Hence the suppressed market share price right now...!.

However the flip side--is....the good news...is.... that we will now soon....imo-- get a positive double whammy effect now....

When the contracts are in blod and ink--then that will be recogniazed intot he ebitaand NPAT...going forward--but....***--concentrate now-- and....**...>>>>-- So WILL THE OTHER SHORT-LISTED DEALS -to be anounced at the Same Time !!-- TO A LARGER EXTENT--As Well....

Now is that simple enough !?? !

Food for thought

Regards,

Robbo ...