LEADCOM, a real growth company.

A few posts back I worked out a conservative figure based on 250m$ revenue in 2007 giving EPS of 7.41p (allowing for a lower margin on big orders and converting at 1.96 US$ to the Pound).

Given we roll into 2007 financial year on Jan 1st, and results are out in late Feb, that would put us on a 2007 current year forecast EPS of 7.41p.

Given they would be reporting revenues with growth of over 100%, would 20 times current year be too high a rating ?

If you base then that 2008 would be over 300m$ without Reliance, and likely 500m$ with it, if you go with the 500m$ figure and then say EPS of 14p, and base LEAD on a simple 13 times prospective forward EPS, then you can see for yourself where they will be going.

I would expect Altium to upgrade to a 105p price target once the first BSNL contracts come through for Leadcom, and then another increase once the Reliance tender gets sorted. There are going to be many more mega tenders in the coming 5 years. This time next year there should be no reason for Leadcom not to be over 150p.........but then again, who knows what will happen.

If you place Leadcom on some of the ratings given to some stocks (like 40 times forward forecast EPS), it will blow your mind away, but Leadcom is putting in higher growth than they are, and Leadcom do not intend any more dilutive placings, they can fund work from present cash and also from bonds should the growth be big.

2006 has been a terrible year in terms of stock performance on the whole, this being due to many factors, nearly all outside of the control of Leadcom. However, if 2006 was a year of consolidation of the SP, then 2007 and 2008 should reap very large rewards IMO.