hi ds,in response to your question on the NDO thread re...

hi ds,

in response to your question on the NDO thread re TOX...
Have to admit that I haven't been watching them but just did a quick bit of research and they do look like they are turning around. At first glance it looks like they started just before last xmas when they announced on 23/12.
Now they are saying that they are profitable so looks like it has got some potential - based on the numbers for first half and what they have announced since - I have not looked at what they do exactly and what the sustainability/outlook is, if forecasts are out there, who is buying etc...

The first half report in February showed that losses continued to decline and the next report if we can believe what they are saying means in profit for the full year.
Here are a few numbers...

1st half pre tax loss was approx $420K and now they are forecasting $1 net profit for the 2nd half. They didn't say pre tax but for this exercise and given past losses lets say we ignore tax - giving a profit of $600K for the full year.
There are approx 402 million shares and 95 million Jan 2006 options - so lets call it 500 million shares outstanding.

Taking $600K profit on 500m shares gives a full year eps of about 0.12 cps. Current price is 2.8 cps so this gives a current pe of about 23 (pretty cheap for a turnaround).

Assuming the trend continues and stuffing around a bit with estimates of future profit scenarios of say profits of

1. $1.5 million profit for 2006 gives a pe of about 9 on current price

2. $2 million profit for 2006 gives a pe of about 7 on current price

Also they will receive nearly $3 million in cash if the 3 cent options are in the money and they likely will be if this trend continues.

Too early yet to look at forecasting financial ratios other than eps.

As far as taking a position in the options goes - hard to say - depends on your risk profile. But might be worth the risk?
A few scenarios could play out I guess - lets say for example all goes quiet on the announcements for a few months until August half year report. What would likely happen then is that traders will lose patience and sell out if the price stagnates and then falls over this period. This being the case and the stock drifted back to nearer 2 cents might see the oppies back at 0.002 to 0.003 leading into a time just prior to the half year report? Might then be a good time to load up as a good half year confirming what they have said already will likely get interest going again in the fpo and maybe another positive outlook might make the share run towards 5 cents plus and the option well in the money prior to January?

Another option might be it keeps going up on existing news and info in the market?

I wouldn't think much chance of a capital raising between now and January.

Looks similar in potential to JUM to me. Your call though - I am not advising one way or the other.

By the way - nothing has changed with my position in NDO - just grown tired of talk, talk, talk over there - time for action on Galoc and then (if it happens!) I can put up posts on estimates for NDO price that will have people calling me a ramper :-)