“Your big opportunity may be right where you are now.” -Napoleon Hill
CPNE: Growth Continues, Stock Still Remains Volatile
When I first laid eyes on the company now known as Commerce Planet Inc. (OTCBB: CPNE), then NeWave Inc., I was about as optimistic of the organization’s future as I now am of my beloved Boston Celtics. At a share price of $.22, the organization was in the red and had seen better days in the market. I feared the worst may have yet to come.
Boy was I wrong. After a long discussion with CEO Michael Hill back in early 2005, I was schooled on his strategy for rapid growth and was quickly transformed into a believer. Mr. Hill understood e-commerce, new media, and most importantly his own business model. More so than many C-level executives representing larger, tier-one organizations that I had the pleasure of working in conjunction with prior to my meeting with Michael.
My mind was changed and my corporate revenue estimates for 2006 and 2010 were set at $14.6 million & $23.1 million respectively in a research profile issued soon thereafter.
Reporting consolidated 2006 revenues of $27.5 million and boasting a healthy stock price currently trading in the $2 to $3 dollar range (a potential discount nonetheless), it appears that my initial gauging of CPNE’s growth was way off.
Announcing recently that not only have revenues increased again for the 5th consecutive quarter & profits for the 4th consecutive, but also that the company logged $8.7 million in 2006 profits (vs. a net loss of $6.3 mil in ‘05), CPNE, despite its monumental growth remains grossly undervalued in today’s market. Closing today at $2.25, a far cry from its 52 week peak of $3.48, CPNE’s fundamentals remain unchanged as rapid growth surges on.
Commerce Planet reported earnings per share (EPS) of 20 cents per share for 2006. Assuming a P/E ratio of only 15, which we all know is very low, versus an industry average of greater than 25, we have a $3 stock on our hands. At an industry average we are looking at a $5 stock. BUT, and this is a BIG BUT, Commerce Planet has proven that it is anything but average. Share price gains of nearly 1000% and profit increases in excess of 240% over 12-18 months are far from average, don’t you agree?
Re-branding in 2006 a Smashing Success
CPNE’s business model has blossomed into a self-sustaining revenue generating machine that continues to provide record gains. Following through successfully on 2006 strategic initiatives that placed strict focus on developing and acquiring synergistic businesses, CPNE fortified its offering with the addition of three new business segments that significantly contributed to recent growth and are expected to do so even more in the future. For the record, the new segments are Legacy Media, Interaccurate, Inc. & OS Imaging Inc.
2007 & Beyond
Commerce Planet has launched into ‘07 with stellar news that has been highlighted by such monumental announcements as a corporate stock repurchase plan, retention of a highly esteemed Merger & Acquisition firm (Sheppard Mullin Richter & Hampton, LLP), engagement of two investment banking organizations (Roth Capital Partners & Craig-Hallum Capital Group) and, last but not least, the BOOMING success of its Consumer Loyalty Group (CLG) business segment.
Outlining increased demand for its products in Business to Business (B2B) environments, international expansion, and the growth of new business segments/products as key drivers for continued financial progress, CPNE’s core businesses continue to thrive as well.
With the investment community anxiously awaiting further guidance regarding CPNE’s success thus far in fiscal 2007, the ensuing days may be your last chance to acquire in this price range. In my opinion, if Commerce Planet is able to maintain its current level of growth and obtain a listing on a more senior exchange, the best gains have yet to come for investors, even those who got in at the ground level.
Leave a Reply
Stock Ticker (OTCBB): LBAS
Website: Click here to visit.
Click here for more on this Spotlight Company »
The question is not whether or not the U.S. Federal Reserve Bank will cut its benchmark lending rate today, but if in fact the cut will have any impact on our wounded economy.
Whether the cut is .25 or .75 points – either of which would bring the rate to an all-time low, economists fear that the benefits simply won’t trickle down the consumer. Recent rate cuts have done nothing to boost the consumer credit market because given current economic conditions, the banks that aren’t going under find that issuing consumer loans at anything else than a premium is far too risky.
A great example of this is the current market for auto loans. Typically influenced by the prime rate, which was roughly 4%, Monday, the interest for a 48-month new car loan is 6.8%.
With Americans now hoarding their money and growing increasingly content with simply not losing their hard-earned greenbacks, the Fed may need to expend some of its “extra ammunition” in addition to its imminent rate cut to get consumers to start spending again.
So, what happens when the rate hits zero and its back to the drawing board for Big Ben and his crew? Here’s a great report written by Ben Bernanke himself on potential strategies for monetary policy when the key rate hits zero.
Have something on your mind? Ask questions of the editor here. We pride ourselves on our prompt responses.
Don’t forget, our FAQ is pretty extensive and was built by answering questions just like yours. It may already have the answer you are looking for but if not, we are standing by to help.
P.S. If you see any posts that are inappropriate, sponsored or could be considered a misuse of the forum, please report them to the editor so they can be moderated, removed or blocked. Thank you for your help in keeping this forum poignant and useful.
Thank you!
The MSP Team
