What is SMN worth

Based on Anodyne's expected earnings of $2 million from existing business, a P/E of 15 would give a price of $0.27.

This is without any input from SMN.

Consequently, each $2 million extra revenue should demand a further 27 cents on the share price if a P/E of 15 is appropriate. It is likely the P/E will be a lot higher than 15 while SMN's revenue is growing rapidly for at least the next 10 years. Once all airlines have placed sensors on all their aircraft SMN's revenue will continue to grow in this one area alone as orders come through for an increasing number of aircraft.

Ignore the fact that millions will be charged for sensors ($20,000 to $70,000 per aircraft courtesy of Toby), the licencing fees alone will be worth $1.44 billion per year by year 10 if all 2, 3 & 4 tier airlines come on board & that there is a huge more potential in helicopters, the military & other potential areas for revenue.

That computes to $14.4 million being charged for each 1% of the potential market for licencing fees by year 10.

This means, that for each tier 1 airline that has sensors fitted to their entire fleet, we should expect another 7 times $0.27 on the share price just for licencing fees. That is assuming $14.4 million of earnings. Therefore, for each $14.4 million of earnings, the share price should rise by at least $1.89.

If SMN obtains 10% of the potential market, the share price should be in excess of $20 & that is only for licencing fees & if the P/E is as low as 15.

The real potential share price could be over $50.00 so current odds of 50-1 looks pretty good to me. You rarely get better odds when trying to bet on the winner of the Melbourne Cup.

SMN has indicated that, if they do not have franking credits to match dividends, they will return shareholders funds in lieu thereof. They expect to return funds to shareholders in the next financial year.