GIGM - Sector: Technology---Industry: Multimedia & Graphics Software

[lizlove]

GIGM has been hot this week..any thoughts

[rocket8]

gigm has been on this message board all week.
i think it will see $3.00+
nice entry points today

[Michael]

Hi Rocket

This is from Yahoo MB:


1. Current assets - TOTAL liabilities = $45 million. For a conservative valuation, fixed assets and goodwill shouldn't be included, only those current (liquid assets) covering all liabilities.

2. Broadband and music - considering the cost cutting measures management has implemented, the profit on these segments should be $1.5-3 million this year. Conservatively, using a P/E of 10, 1.5*10 = $15 million. Again this is a very conservative valuation.

3. Online gaming – here's the difficult one. GIGM has only been in this business about one year, but the industry is growing like wild-fire. First-movers have the advantage here, and GIGM is a first mover in ASIA, and Asians love to gamble. They made $2 million profit in the 4Q/04. Amazing, considering the little amount time they've been in the business. Margins are great here, around 50%. Conservatively, let's say they need time to get the ball rolling, and have extra expenses associated with a growing business, so they only make $6 million for '05. A growing business like this deserves at least a 20 P/E so that's (20*6) = $120 million.

So add it up, 45+15+120=$180 million. In other words, at least (50million shares/180,000,000 value) = $3.6 per share.

I think this is a conservative valuation, and I am a firm believer in the rapid growth of online gambling. If GIGM plays their cards right, marketing their product well, the sky is the limit here.

I think it is very conservative as well. Online gaming has been growing very rapidly since they took over the business. (300%) from Q3 to Q4. If you assume that it would grow with just 33% over the next quarters the revenue and profit would look like this (assuming the profit margin would stay the same which also is conservative):

   Q3 04   Q4 04   Q1 05   Q2 05   Q3 05   Q4 05   Full year 2005
Revenue   2,236   6,838   9,095   12,096   16,087   21,396   58,674
Profit   50   2,061   2,741   3,646   4,849   6,449   17,685
                     
P/E                     20
Market cap                     353,690

With 50 million shares gaming alone could jystify $7 per share. I guess people comes with these very conservative forecast because $7 just seems to good to be true. Sometimes people needs the truth en small packages!

[rocket8]

Hi Michael,

I saw that post on GIGM yahoo board too.  I was wondering why volume and price are low today.  For such amazing news GIGM has not really moved that high.  Its trading today at $2.35 and has nearly $1 in cash.  I wonder if people are skeptical because it is a Taiwanese company.  I also wonder if volume will drop back to 200,000 or less per day and the price fall back.  I clearly agree that GIGM is worth much more.  $200m MKTCAP seems very very reasonable.  What do you know about the IPO?  Is that the culprit?  Is it new shares to be issued?

Rocket8 

[rocket8]

financials for GIGM....

http://ww3.ics.adp.com/streetlink_data/dirGIGM/sa2F06.pdf

proxy for GIGM....

http://ww3.ics.adp.com/streetlink_data/dirGIGM/saDEE5.pdf

PARTYGAMING goes public next week I believe.

[Michael]

Nice bounce off from the support at 2 on Friday.

The Yahoo MB is boiling due to the Party gaming IPO and GIGM will post Q1 in July and I think we will see a steady increase till the figures are out!

[rocket8]

watch gigm

[setravis]

Will leave the chart.

[rocket8]

i was trying to find a list of licensees of CES (GIGM's subsidiary) software?
michael -- do u know any of the sites?
i saw a few on yahoo msg board for GIGM.

go GIGM.

[rocket8]

check out gigm today

[rocket8]

hi michael,

i have heard earning estimates of $0.14 to $0.17 for GIGM for this year but I have not been able to verify that more than 1 analyst actually predicted that.  I looked on yahoo and hoovers.  Yahoo has 1 analyst prediction but it doesn't appear very real to me.  Only $0.02 for 1st quarter is the prediction.

GIGM is moving up slowly each day.  pretty good.

-rocket8

[rocket8]

CHECK OUT GIGM
SORRY FOR THE NEW THREAD
DELETE IT AFTER

[eliteG]

maybe setting up for next week  goodluck rocket

[Adam]

ON THE MOVE BOYS!!

[Michael]

It sure looks like it is ready for the next step up. Q1 is out this month and managemnet has been very bullish - especially on the online gaming business.