esn & mkb - a comparative analysis, page-147

MeToo,

Thanks for posting something of substance for a change, even though it's just my work with different numbers - anyway, I am willing to discuss further as your post is reasonable.

In relation to the calc's in your post it appears that the only thing that is different from my post/calc is the PE.

I believe that my PE is more applicable and it appears that you don't understand how these stocks are valued.

For example, the only comparable stock that we can compare ESN to is MBE (MKB is not making profits) and its PE is 130 - well its PE was 130 the last time I checked, which was a week or two ago...I just checked it again and its PE has gone up to 176.67 (per CommSec)!

The 19.36 PE that you are referring to/using is for the whole sector and is mainly made up of/affected by/calculated using blue chip stocks (ESN with a market cap of $9M fully diluted will not alter this ratio at all as only the big blue chips (ie. CPU worth $6 Billion+) will alter/affect the ratio:

You can't compare ESN to stocks such as CPU and CRZ which pay dividends of up to $150M+ every year.

ESN is valued at $9M (fully diluted) and is a growth stock with massive potential and that is what it is/will be valued on. As soon as the business model/concept is proven with a revenue confirmation, this will get re-rated accordingly using not the sector PE used for blue chips but using the potential of the company going forward and as a minimum the PE of MBE (imo), assuming the potential is as great as MBE's.

If we applied the Sector PE of 19.36 for MBE, then MBE would be valued at $9.4M instead of $86M and its share price would be 2.9c instead of its current and growing share price of 26.5c!


Let's try the calc's again with the current PE of MBE: