Too late to buy FCCN?

The first thing I did was to check if the market cap on marketwatch.com was right, and it wasn't if you take into account full dilution, as you should. So the market cap of FCCN.OB is 34,519,282*$0.071=$2,450,869.

Still we're talking about an extremely small company in market value.

The company did show a profit in the first quarter, of $0.005 per diluted share, which gives us a P/E ratio of 14.2, pretty conservative given the growth of the company. But, you see, this profit was made out of profitable private investments more than from actual revenues.

What do these guys do? «The Company invests in developing and franchising casual dining restaurants.»

They also say this in the latest SEC statement: «At March 31, 2005 our investment portfolio totaled $602,480 at fair value. Our investment objective is to achieve current income.»

On July 26th we've had these news: Franchise Capital Corporation Announces Agreement for 12 Kokopelli Franchises in S.E. Michigan Market

I would like to highlight this: «This latest sale of 12 franchises in Michigan reflects Kokopelli's goal to reach all the corners of the country. I would like to remind shareholders that each Kokopelli franchise sold is expected to generate up to $60,000 or more per year for the franchise company on an on-going basis from royalties, in addition to the cash sum from the purchase itself. To date, Kokopelli has sold 49 franchises from coast to coast. This number will only continue to grow with more announcements of franchise sales to come in the coming weeks."»

So, 12*$60,000 = $720,000 from this deal alone. Considering the 49 franchises Kokopelli has now, we can figure the company will get about $2,940,000 in revenues per year, and that's more than the current market cap of FCCN.OB.

FCCN.OB has other franchises, besides Kokopelli (this picture was taken out of the 10-Q SEC report for the first quarter of 2005, the situation has improved since then):



Considering FCCN's chart, it has a bullish trend:



Still, just $2.45M in market cap, so there's a lot of room to grow ...

I guess this stock could still rise 10 fold, doesn't matter it has risen 10 fold already. Ramsburg bought the stock near its lows and still has it, read here: FCCN.OB… My bet as the next big penny mover

Perhaps we'll buy this stock for the 3 Pennies on Fire Portfolio today

David Randolph
www.3stocksonfire.org


Join our Free Newsletter and receive alerts on Stocks On Fire.