I bought JIN pussinboots and the similarities I see in both of...

I bought JIN pussinboots and the similarities I see in both of them is the license renewal uncertainty.

I'm kind of stumped right now because I really don't know which valuation technique to use. On a forecast FY13 NPAT of 3 the PE would be ~8.9 but on a EV/NPAT ~2.4 Note I'm using my average buy price of 15c. 2.4 sounds cheap but 8.9 doesn't. It is a scale business (call centres and platform already set up) so majority of the incremental revenue should drop to the bottom line. I really dont know how long it'll grow for and by how much so I've just calculated it as a 15% FCF discounted bond. Which is very big and I'll keep track of it every half yearly.

Im currently stumped with valuations because I've recently back tested some really good private investors results and they just use PE ratios. On the other hand Warren Buffet and Joel Greenblatt always talk about valuing a stock as a whole business hence enterprise value. Pussinboots if you have any thoughts please feel free to comment.