SWKJ.OB – is no longer valid. It has changed to SBDNE.OB

[andyman]

Hi slomo,

A little bit more patience, the profis know the pennymarket is much about PR, much more than the regulated market. So the first positive news ignite the rocket the next positive news will be taken for granted. And a contract alone does not mean profit. In first instance it means liability!

So, I expect more jittering between 0.05 and 0.1.
Consider all this news and data are project related. Nobody knows how much of these moneys you finally will find in SWKJ's balance sheet. Business insider know that a lot of money can disappear on the travel between Thailand an the States. Believe me.

The next stage of the rocket will be ignited when data providing a clue about how much SWKJ truly will profit from this deals. That could be clear information about profit sharing between Prestige Asia and SWKJ up to the quarterly report. Until then the share price is mere pure speculation rather than investing.

Just take as reference yahoo.finance data and you will see the latest data

Diluted EPS      -0.51
CF from Operations   -3.43K
FCF      -865K      
Market Cap/Revenue   ~9 Mio. / 220 K   -> ~ 42

Under this conditions the share is bound to the pennies with the cap at around 0.12$...0.2$. And expect quick fall backs from these levels as there is no real value at the moment which can support the share.
Only when the revenue riches a similar class than the market cap, the diluted EPS and/or the Cash Flow turns positive than the stock can advance into the 1$ area.

My very rough calculation (in general, not only for this share) is as follows:
((Revenue*Average Profit Margin) / # of shares) * Market P/E Ratio    -    which I like to call substantial value (just very rough, to get a feeling).  If you take as average profit margin 20%, which is OK and could be more but consider it's a starting company so a lot of cost occur, a market P/E Ratio of 14 (average) you will get for current 115 Mio. Shares and a possible yearly revenue of estimated 12 Mio.$ (just estimated that all the projects becoming true and no project duration is known to me until now)

((12 Mio.$*0.20) / 115 Mio. Shares) * 14 = ~0.3$

That's then a possible base and with an enthusiasm factor of 2...2.5 we could reach up to 0.7$ peak, but not now.

Really, the judgment day will be the day when the 10Q's will be released containing the first figures about the true impact of these projects on SWKJ's balance sheets. And as I already said, I am waiting for these days!   

Andyman

[slomo007]

andyman is the man.  I agree with you 100%, it's just a matter of time and this has just turned in to a long term hold for me.  I will hold until we see it on the financial statements, unless we see something strange like public dilution or I get some hint that we haven't been hearing the truth.  I am always suspicious of pennies, but I do think we're hearing the truth. 

I keep going back to the thought that the company now has 75M (registered, not issued) .08 shares to distribute over time to their employees, and what would they want more than to make those .08 shares more valuable than by boosting the stock price. 

I'm long, and it's by far holding more of my money than any other penny.

[slomo007]

Information regarding hurricane reconstruction.

These stats are from Katrina alone, from the Army Corps website:

Total 381 Contracts for $851M awarded
Small Business - 164 Contracts for $315M, 37% of total allowance for this type of contract.

(Here's the key)
Small Disadvantaged Business (includes 8(a) and Minority Owned) - 57 contract awarded for $189M, 22% of total allowance for this type of contract. (22% is the key figure)

This data is current as of 10/25.

What does this mean? It means that the large majority of contracts for small minority owned businesses have not even been given out yet! It means that SWKJ still has a great chance to get one, because they're giving contracts heavily to minority owned businesses. It does slightly hurt Siteworks that they are located in Florida and not Louisiana, Mississippi or Alabama....but you would have to think that with Wilma recovery looming, that Florida businesses will get the edge in that realm. While I am not happy that these natural disasters occured, someone has to clean up after them.

BTW, all of this data can be found here: http://www.hq.usace.army.mil/cepa/katrina/contracts.pdf

[runforthedoor]

NEWS out..........

http://www.pinksheets.com/quote/news.jsp?url=fis_story.asp%3Ftextpath%3DCOMTEX%5Ciw%5C2005%5C11%5C02%5C71966561.html%26clientid%3D168%26provider%3DInternet_Wire&symbol=SWKJ

[setravis]

Oh yes....nice to see this one move.
+22.22%.....Volume @.......431,985

[setravis]

Lovely...does my holdings good...
Got some attention this morning...moving on up.
+37.04%......Volume @......833,430

[slomo007]

I don't know that I've ever seen a stock react to news like this one routinely does.  It will have a violent runup followed by a violent run down within the first hour.  Then, sometimes throughout the day it will rebound to a decent level but sometimes it will continue trickling down to the point where we're lucky if it closes green.  For a stock with such a low float, it really makes me wonder why the people who own it don't do enough DD to know that it's extremely undervalued at these levels.  $30M in contracts? .06?  Something's just not right about that.

[kobajashi25]

What do you mean?  "Something's just not right about that. "

Do you mean that they are trying to hold the stock down for some reason ore do you mean that there is somthing wrong with the company??

thanx

koba

[slomo007]

What do you mean?  "Something's just not right about that. "

Do you mean that they are trying to hold the stock down for some reason ore do you mean that there is somthing wrong with the company??

thanx

koba

Neither one.  I simply think the market is not pricing it correctly - likely because all of their main projects thus far are overseas.  I personally believe everything the company is saying about the new contracts, but many American investors want to see domestic results before seeing overseas results.  That's why, IMO, that it would be HUGE to get a hurricane reconstruction contract from the US government.  That would show everyone that this is not just a scam company with nice PRs, it is a legit business with a real domestic presence as well as overseas. 

The market will take care of short-term price inefficiencies, so I will hold until we see the results on paper if that's what it takes.  It's pretty hard to ignore financial statements.  If you can afford to keep your money in it until next year, then there's no reason to sell at these levels.  By my math, with the new contracts, we're looking at minimum .25, possibly more. 

[gmarc66]

Hi guys...I have been wondering too why SKWJ could not seem to hold its gains lately ...then i remeber that someone, on some other board had mentioned that they came out with an S-8 and that is why they sold out of swkj a little while ago. I guess that means dilution  ...but, I could not find an S-8 filing...can anyone look into that and see if what I read is true ...cause I have no idea at this point if something has happened to the share count, or its just heresay.

good luck to all holders (im not holding,but concerned )

julia

[slomo007]

Yes there was a 40M share s-8 filed a week or so ago.  It was for the employee incentive plan, and by law, cannot be sold on the open market.  It will have to be distributed to the employees, and can then be sold on the open market if the employee chooses.  We have seen an increase in the O/S count of about 8M since the 40M shares were registered, so in other words, 8M shares of the 40M have been issued.  The O/S share count will likely go up to 171M after all s-8 shares are issued...though I have no clue how long this will take. 

The company still has a very low float for a penny, and I am fine with the s-8, as long as they are not all issued at once and used up right away. 

[gmarc66]

Thanks Slomo..nice work!

Hmmm....i guess SWKJ just needs some time then to recuperate.

good luck to you

julia

[slomo007]

Thanks Slomo..nice work!

Hmmm....i guess SWKJ just needs some time then to recuperate.

good luck to you

julia

That's what I'm hoping.  From a fundamental standpoint, we're very underpriced.  Typically fundamentals win out, but obviously nothing is for sure. 

Thanks for the good luck, we may need it. 

[slomo007]

News just released: http://biz.yahoo.com/iw/051103/0100109.html

[slomo007]

Posted this on Ihub, thought I would post it here as well:

Small cap construction companies trade anywhere from .5-3 x revs. The company has announced about $35M contracts, with the possibility of more in the near future. We have also been told that the largest contract, $16.5M should be started and completed next year - meaning the revenues will fall entirely in that year. We have not heard about the rest of the contracts. Let's guesstimate that approx $25M will be recognized next year.

Let's also take the worst case scenario that all of the s-8 shares will be issued between now and next year. Because other forms of dilution are not predictable, let's leave it at that. That would give us about 175M shares O/S.

So, if SWKJ trades at:

.5 MktCap/Revs = 175000000(x)/25000000 = .5
Price (worst case with no more dilution) would be .0714

1 MktCap/Revs = .14

1.5 MktCap/Revs = .21

2 MktCap/Revs = .28

2.5 MktCap/Revs = .35

3 MktCap/Revs = .42

And the best part, is that this is only counting $25 of the $35 expected revenues, and this is also IF they issue ALL 40M of the shares from the s-8.