Investrend are just scammy promoters. Go back in time and see the UNBIAS reports Investrend wrote about.
web.archive.org*/http://investrend.com
MAWI AND SNMM TO NAME A FEW. THEIR TRACK RECORD IS RECOMMENDING STOCKS WHICH ENDING UP GOING TO ZERO IN A FEW YEARS. LOL
THE WAYBACK MACHINE DOES NOT LIE!!
ITS QUITE A CON GAME THEY HAVE GOING.
M&A West, Inc.
(NASD OTCBB: MAWI)
Q1 2000 Update
Darren E. Robinson, CFA
Analyst
Now available in pdf
Date of Report:
Oct. 5, 1999
Shares Outstanding:
11,000,000
Recent Stock Price (1):
$5.25
Estimated Float:
3,000,000
Price Range: May 17/99-Sept. 30
$4.125 - $20.00
% Institutionally Held:
0%
Industry Sector:
Internet Venture Capital
Recommendation:
Buy
30-Day Avg. Volume:
52,000
12 Mos. Target Price
$14-$16
Earnings & P/E
Fiscal Period (Mar.31)
Primary EPS
P/E
1999 Actual
$0.01
525X
2000E
$0.49
10.7X
Buy recommendation is reaffirmed for M&A WEST.
Target price increased and time frame decreased since coverage initiated.
Basis of Recommendation
Company profitable since current business model was introduced which is highly unusual in this sector.
Stock price is down significantly from its 52 week high of $20.00. Current price is attractive at these levels based on revenue growth potential.
Business model facilitates a shorter product cycle. Intention is for each subsidiary in stable to be a separate public entity within 8-12 months. In other words, product cycle is short which lowers the probability of carrying non-productive asset on books.
Market cap to forecasted revenue very favorable at approximately 5.3X.
Investment Highlights
M&A West, Inc. (MAWI.OB) develops, invests in, and operates Internet and technology related companies. Its strategies include the internal development and operation of majority owned subsidiaries, as well as investments in other Internet companies, directly or through venture capital arrangements. Shareholders are provided participation in client companies via M&A West investments.
M&A West's strategy is four fold in that their primary business objectives are:
to become a meaningful player in the acquisition and development of Internet and technology companies
to provide seed capital to newly emerging Internet companies
to provide a full line of business services to emerging micro-cap and small-cap companies to increase awareness of their business
to create and grow offshoot Internet-related companies under the M&A West, Inc. umbrella
With the proliferation of Internet related investment vehicles, M&A WEST offers investors a one stock play on the Internet by offering investments involved in both business to business, and business to consumer. Industry estimates are that these two avenues will grow to one trillion dollars in the next 4-6 years, an increase of over 3000% from current levels.
Despite the recent correction in Internet related stocks, investors clearly have not lost their appetite for new issues and will continue to pay a premium for quality Internet related issues.
Since the initial report dated July 1, 1999, M&A West has maintained the same business model and has executed a few significant transactions. The company continues to focus on investing in early stage Internet related companies. Some of the investments worth noting are:
Digital Bridge, Inc.: provides e-commerce, web site design, hosting, and Internet marketing services. The company announced on September 29, 1999, that it will be spinning off Digital Bridge as a separate public company. Shareholders of record on September 30, 1999, will receive one share of Digital Bridge for each two shares of MAWI held. Digital Bridge should commence trading within a few weeks.
Virtuallender.com, Inc. (OTC BB: VLDC): a publicly traded company engaged primarily in electronic mortgage lending.
Virtualwagering.com, Inc.: provides sports betting and casino-style gaming on the web. The site features live sports scores for all major sporting events.
Virtualgroceries.com, Inc.: plans to offer online ordering and home delivery of gourmet foods and wine, as well as recipes, kitchen items, cookware, and gift items from specialty stores.
Workfire.com, Inc. (OTC BB: WKFR): develops and markets software and services that enhance performance of Internet access. Proprietary technology enables multiple distributed computers to work together to increase Internet performance and reliability.
M&A West reported first quarter results as follows:
Net Income for Q1/00 was $1,782,257 on revenue of $3,458,202. Earnings per share for the quarter were $0.16, ahead of internal estimates.
Revenue
M&A West derives revenues as follows:
The company enters into contracts with clients usually for a minimum one-year period. Because they are investing in early stage companies, M&A West typically takes a significant portion of their revenue in the form of equity. This method allows the investee companies to utilize their cash for internal and external growth and provides M&A West assets with a much higher growth potential than cash. The investment in Workfire.com is a typical example of M&A West?s investment method. M&A West entered into a contract with Workfire to provide consulting services related to developing the company and creating a separate public entity.
The current structure of the company is beneficial from a shareholder perspective. So far management has ensured that cash flow is sufficient to fund future investments while maintaining the independence of the subsidiary companies.
Financials
M&A West was very aggressive in Q1/00 in investing cash. As indicated in the balance sheet, cash decreased by $960,000 to $181, 425. This quarter, deferred revenue of over one million dollars will be booked which will offset the decrease in cash and will maintain M&A West?s ability to finance future endeavors. The company is in a solid financial position with no debt and ample cash and marketable securities to finance future investments.
Balance Sheet Unaudited Audited
8/31/99
5/31/99
Assets
Current Assets
Cash and Equiv.
$181,425
$1,141,813
Accounts Receivable
10,000
Marketable Securities
(held for trading)
4,690,225
573,976
Investments-at equity
1,097,088
426,558
Investments-at cost
610,890
327,000
Employee advances
8,732
8,000
Prepaid taxes
126,000
Total Current Assets
6,714,360
2,487,347
Other Assets
Deferred Income Taxes
12,110
12,110
PPE, net
23,999
20,584
Homesmart, restricted shares
87,825
$6,838,294
$2,520,041
Liabilities and Stockholders Equity
Current Liabilities
Accounts Payable
$23,727
$114,127
Income Taxes Payable
1,709,000
168,000
Payroll taxes
32,464
25,912
Deferred Revenue
1,078,844
0
Total Current Liab.
2,844,035
308,039
Stockholders Equity
Common Stock, 11000000 shares issued and outstanding
2,020,538
2,020,538
Retained Earnings
1,973,721
191,464
Total Equity
3,994,259
2,212,002
Total Liability and Equity
$6,838,294
$2,520,041
Balance Sheet Comments.
Investments where the company has significant influence are accounted for at market value.
Investments in non-trading equity securities are accounted for at cost.
Earnings Model
Earnings Model*
Fiscal Year (March)
Q1/00(A)
Q2/00(E)
Q3/00(E)
Q4/00(E)
Year (E)
Revenue
$3,458,202
$2,500,000
$2,000,000
$2,500,000
$10,458,202
S,G&A Expenses
518,180
300,000
325,000
35,0000
1,493,180
Income from Operations
$2,833,793
2,200,000
1,675,000
2,150,000
8,965,022
Other Income (Expenses)
Interest Income
542
0
0
0
542
Gains/Losses on Sale of Securities
173,292
0
0
0
173,292
Equity Gains/Losses in unconsolidated subs
-37,370
0
0
0
-37,370
Total Other Income
136,464
0
0
0
136,464
Net Income before taxes
$2,970,257
2,200,000
1,675,000
2,150,000
8,995,257
Income tax expense
-1,188,000
-880,000
-670,000
-860,000
-3,598,000
Net Income
$1,782,257
$1,320,000
$1,005,000
$1,290,000
$5,397,257
EPS
$0.16
$0.12
$0.09
$0.12
$0.49
Average Shares Outstanding
11,000,000
11,000,000
11,000,000
11,000,000
11,000,000
*Effects of the Digital Bridge spin-off are not included in this model. They will be revised at a later date as more information becomes available
This earnings model makes no forecast for future trading gains or losses. The ability to book trading gains in subsequent quarters would have a favorable impact on the valuation of M&A West.
Valuation
Revenue is forecasted to be $10.5 million for fiscal year 2000. The current market capitalization is approximately $55 million. This would give a market cap to forecasted revenue multiple of between 5 and 6X, a very low multiple for a profitable company engaged in Internet venture capital. Based on the revenue projections for 2000 and a conservative, yet realistic, multiple of 15-18X, which is in line with other companies in this sector, we believe that this company could be trading at $14-$16.00 in the next 12 months.
Investment Risks
While we believe that M&A West has invested in some very interesting companies, the portfolio of companies is young and does not have a long earnings record. Marketable securities, being the largest asset, are subject to a fairly high degree of variability due to the requirements of being reported at the lower of cost or market value. Investor sentiment changes quickly, and as such, these companies are subject to a degree of variability.
Darren E. Robinson, CFA
Mr. Robinson is a member of the Toronto Society of Financial Analysts and the Association for Investment Management and Research. He has over 6 years of Financial Services experience including working as a mutual funds analyst at Dundee Mutual Funds. Along with being a CFA charterholder, he has completed course work with the Canadian Securities Institute and holds a Bachelor of Arts degree in Mathematics from York University.
M & A West, Inc. 583 San Mateo Avenue, San Bruno, CA 94066 Phone (650) 588-2678 Fax (650) 827-9508 Contact Mr. Scott Kelly e-mail scott@mawest.com web site web.archive.org
Investrend Research John M. Dutton, President, 801 S. Figueroa, Suite 1100, Los Angeles, CA 90017 Phone (213) 929-2618 Fax (213) 623-4590 e-mail jmdutton@mediaone.com web site web.archive.org.
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