![]() |
News Alert
|
Trident Systems International, Inc (OTCBB: TDSY) |
6 Month Target Price: $2.99 |
|
| Shares Outstanding |
11.7 million |
|
|
|
| Approx. Float |
1.6 million |
|
|
|
| 6 Month Price Proj. |
$2.99 |
|
|
|
|
A Few Reasons to Own TDSY:
| 1. |
$40 Billion Dollar industry |
| 2. |
30% Annual Industry Growth |
| 3. |
TDSY Embarks on $100 Million Synergistic Acquisition Strategy |
| 4. |
TDSY Projects 2002 Revenue of approximately $19,500,000 |
| 5. |
TDSY Projecting $30,000,000 in Revenues for 2003 |
| 6. |
Veteran management team with proven industry track record |
| 7.
|
Continuous legislation of complex employment laws and regulation necessitate the outsourcing of human resource management |
| 8. |
TDSY Recently Launched New Multi-Channel marketing initiative |
| 9. |
TDSY Entered definitive Letter of Intent to acquire a Computerized Payroll Services Company |
| 10. |
TDSY’s CEO appointed presidential business commission and honorary chairman of republican parties business advisory counsel |
|
| Update |
|
Great News! In our opinion, today's press release is significant, because out of management's own mouth they are validating our valuation theory.
With new revenue projections for 2003 being $34 Million Dollar, and management now expecting TDSY to be profitable, we believe given appropriate market conditions our hypothetical target price of $2.99 per share could be realistic.
In reality, based on today's press release we can derive another valuation based on earnings per share. As stated below, management states that earnings will be in the seven figures.
With approximately 11.7 million shares out standing, if we were to assume that seven figures meant at least $1 Million Dollars in earning, then this would equate to about $0.08 per share in earnings.
Based on today's stock price, TDSY is currently trading at a $6 Million Dollar market cap, and about seven times this years estimated earnings per share at a minimum.
On a earnings per share basis, if TDSY traded in the market place at one half this years growth rate (50% plus), this would equate to a 25 multiple, with at least $0.08 per share in earnings, TDSY should be worth at least $2.00 per share.
In conclusion, in our opinion, based on today's press release, it appears to us that TDSY is undervalued and has plenty of room to move on the upside.
|
| Press Release |
|
AAMPRO GROUP, INC. ACQUIRES PAYROLL SERVICES COMPANY AND LAUNCHES NEW PAYROLL PROCESSING SERVICE "AAMPROPAY"
WHITEHOUSE, NEW JERSEY, January 14, 2003. AAMPRO GROUP, Inc. (OTCBB: TDSY) announced today that it acquired AMSTAFF, Inc., a computerized payroll and administrative services company. The transaction was structured as an asset purchase with the consideration being paid in stock options on an earn-out basis. The acquisition closed January 2, 2003. Concurrent with the acquisition, AAMPRO formed a new subsidiary entitled AAMPROPAY, LLC. to market the payroll services. AAMPRO CEO, Stephen Farkas commented "The payroll services sector is an important component of our growth strategy and this will help leverage our existing marketing campaign to cover a broader target market." Terri Munkirs, CEO of AMSTAFF,\ stated, "We are very excited and look forward to contributing to such a vibrant organization."
AAMPROPAY will focus its attention on small, medium and large sized companies on a regional basis initially and eventually expand the service radius over the next eighteen to twenty-four months. The introduction of AAMPROPAY will allow the company to compete in the $500 billion plus payroll services arena. CEO Stephen Farkas further stated that the expectations for 2003 for this new division are approximately $2,000,000 in revenue with earnings of 10%. As a result of this acquisition, AAMPRO GROUP, INC. is increasing its company wide revenue forecast for 2003 from $30,000,000 to approximately $34,000,000 with earnings into the seven figures.
About the Company:
The Company, through its subsidiary AAMPRO, Inc. ("AAMPRO"), primarily conducts its business operations as a professional employer organization ("PEO"). AAMPRO provides a broad range of services comprised primarily of employee leasing and human resources management. These services include payroll and benefits administration, health and workers' compensation insurance programs, state and federal labor compliance, tax filings, safety program design and management and other related services to small and medium-sized businesses nationally with a primary concentration in the tri-state (New York/New Jersey/Pennsylvania) region. AAMPRO was organized as a corporation in 1995 and has provided PEO services since inception.
AAMPRO's services are designed to improve the productivity and profitability of small and medium-sized businesses by relieving business owners and key executives of many employer-related administrative and regulatory burdens that enable them to focus on the core competencies of their businesses.
Forward-Looking Statements
This news release contains forward-looking statements about our business, or financial condition and prospects that reflect our assumptions and beliefs based on information currently available. We can give no assurance that the expectations indicated by such forward-looking statements will be realized. There may be other risks and circumstances that we are unable to predict. When used in this news release, words such as "believes," "expects," "intends," "plans," "anticipates," "estimates" and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions. All forward-looking statements are intended to be covered by the safe harbor created by Section 21E of the Securities Exchange Act of 1934.
|
| Valuation |
|
With the PEO industry valued at $40 Billion Dollars, and growing at a rate of 30% annually, it appears to us that TDSY has plenty of room for growth. TDSY generated $10 Million Dollars in revenue in year 2000, and 17 Million Dollars in 2001. With an experienced management team and state of the art technology, TDSY could also be one of next years surprise stocks.
If we look to value TDSY on a multiple of revenues, if TDSY were to trade today in the marketplace, at one half the multiple of revenues as its peers (which is 2.33 times), then based on the company’s forecast of $19.5 Million Dollars in revenues for 2002, this would equate to a stock price of $1.94 per share. Which would be about a 150% Profit from today’s close, and could represent a short term move up, since 2002 is just about over.
If over the next 6 month’s as developments evolve for TDSY, and the market catches on and believes that TDSY is on track to generate $30 Million Dollars in Revenues and be profitable, then applying the same formula above would imply a potential stock price of $2.99 per share.
|
| Conclusion |
|
With the continued positive outlook in TDSY’s revenue and earnings growth, we believe that TDSY is a compelling and undervalued investment opportunity for risk-oriented investors. We believe, as Wall Street catches on to the TDSY story, this could have positive effect to TDSY’s share price.
|
|
