Tootie Pie Provides Upward Guidance
Tootie
Pie Co. provided guidance regarding financial
results expected to be included in the THIS
month’s Form 10-QSB filing for the quarter
ended September 30, 2007.
Boosted by strong sales through its distributor
channels, the Company expects to report its
second highest non-seasonal quarterly revenue
to date, with revenues increasing approximately
100% over the same quarter of 2006.
These improved results were driven by a high
number of repeat sales to existing customers,
as well as continued growth of new customers
in our current wholesale market area of ten
states and 12 distribution centers (versus
four this time last year).
The Company’s multi-unit chain development
is producing results noting an increased number
of locations.
Increased revenue represents both a sustaining
influx of capital to the company resulting
in implied value to existing and prospective
shareholders and serves as a precursor to
expansion while increasing the potential for
Tootie Pie Company to be a buy out target.
A 162% increase in revenues as compared to
the quarter June 30, 2006, was impressive
but when supported by the additional upward
guidance it is important to take note of this
stock before earnings are published.
Tootie
Pie Bulding an Iconic Brand
Leveraging
an Iconic Brand
Tootie Pie is exploiting an iconic brand infused
by innovation, reformulation and now has taken
an indisputable seat at the premium spot at
the table – the table could be called
the Tootie Pie Table.
Tootie Pies had a strong following and a mystique
before The Company was purchased by Tootie
Pie Company, Inc. on June 16, 2005.
Tootie Pie’s marketing efforts on multi-unit
chains clearly demonstrates this new division’s
prowess.
Tootie Pie’s iconic brand has in the
last quarter reached a fevered pitch with:
•
Inclusion as a premium product in Neiman
Marcus Catalog
• Sales in Upscale Houston Grocer
• The pie of choice to be delivered
with Twentieth Century Fox Home Entertainment
Movie: The Waitress.
Tootie
Pie Brand Building
Neiman
Marcus
We are witnessing the realized value of the
development of this iconic brand with the
inclusion of Tootie Pie in the Fall 2007 Neiman
Marcus Catalog. In addition to the modernization
of production and marketing since the purchase
The Company has masterfully devoted itself
to the leveraging of the Tootie Pie brand.
Neiman Marcus cannot be fooled. They have
the most sophisticated buyers in the world
who understand their consumer’s demand
quality. If the quality of the pie is not
the highest or is compromised by reduced quality
including sugar and fat variants the product
could never be a Neiman Marcus product.
Across the board premium and gourmet recipes
attract today’s consumers as they become
more aware of the provenance or their purchases
and demand higher-quality ingredients in desserts.
This demand for quality is accompanied by
an increased awareness of the need for healthy
eating and Tootie Pie has addressed that issue
by eliminating transfats.
As consumers become more savvy with their
understanding of ingredients and nutritional
information this move will only enhance the
appeal of what is on its way to becoming the
iconic premium pie brand: Tootie Pie.
The Neiman Marcus Fall 2007 Catalog inclusion
enables Tootie Pie to gain a strong foothold
in the premium marketplace.
Another trend in the bakery market is consumer
interest in retro options. Delivering old
favorites in the pie category is at forefront
in contributing to Tootie Pie’s growing
iconic image.
Rice
Epicurean Market
Rice Epicurean Markets which is composed of
five stores in Houston, Texas. Rice carries
unique, top-shelf items to offer our customers
in the Houston market and are located in prime
demographic markets. These markets range in
size from 25,000 to 42,000 square feet and
each store is merchandised to be in tune with
its particular neighborhood.
Fox Home Entertainment Division Selects
Tootie Pie
Fox Movie’s Home Entertainment division
will promote the DVD release of their movie,
The Waitress, with Tootie Pies. Fox Entertainment
will send a Tootie Pie to 174 of Fox's top
DVD retailers. Many of these retailers are
grocers which include among otheres: Kroger's,
HEB, Albertsons and Target/Dayton Hudson.
Marketing
& Sales Website
Tootie Pie Company sales are skewed toward
wholesale food services at this point. However,
they have completed the enhancement process
of their online ordering system. There are
no specific numbers available from the Company
illustrating the distinction between margins
for retail and internet sales, as compared
to wholesale foodservice sales. The Company
considers this information proprietary but
acknowledges that retail margins are better
than wholesale.
Website Sales. The new website initiated by
Tootie Pie www.tootiepieco.com
represents Tootie Pie's fully committed effort
to exploit their work in brand building. This
site accurately calculates shipping costs
and provides an easy access point for purchase.
Enhanced Web Presence. The Company’s
web site investment can be considered to be
a growing source of sales. The Company intends
to continue to utilize various e-commerce
sales methods, such as pay for clicks, to
enhance search engine optimization rankings.
It is their intention to modify their website
to facilitate e-commerce sales transactions
from point of sale through accounting and
contact management software.
Email Campaigns for Database. Tootie Pie Company
engages in regular, generally event driven,
email campaigns to their existing customer
database; promoting their pies and offering
specials. The Company’s growing database
serves as a cost-effective and productive
sales tool, providing the Company with consistent
trends, ordering patterns, and percentages
for future marketing efforts.
Retail Sales. The retail segment serves individual
consumers through in-store sales at their
Boerne storefront, orders via telephone and
internet orders on their website. The Company
utilizes website marketing strategies, such
as pay for click campaigns and medi-tags,
in order to not only drive customers to their
website, but to also track their purchasing
practices.
Corporate
Sales
Tootie
Pie’s corporate segment has experienced
a ‘perfect storm’ in terms of
exposure and will strongly benefit from the
website enhancement.
The inclusion in the 2007 Neiman Marcus Fall
Catalog has the potential to enhance business
and corporate orders. Businesses purchase
pies for gifts, events and/or personal use.
The Fox distribution of the Tootie Pie with
the movie, The Waitress, to 174 distributors
is also an enhancement to Corporate Sales.
Tootie Pie believes this segment will play
a key role in their future growth. Their current
corporate customers send their pies to their
contacts and employees. Tootie Pie believes
that once those end-recipients sample the
quality of their pies, they may become their
future customers.
Sales Force. Tootie Pie Company’s
stair step business model currently consists
of a small sales force, with plans for expansion
over the upcoming months. Tootie Pie has targeted
national accounts that represent multiple
units in multi-state regions on a select basis.
Their current focus is on building regional
chain accounts running on average of 10-20
units.
Food
Service Brokers Expanding Territories
Food Service Broker. Tootie Pie Company utilizes
the services of a food service brokerage company,
whose services include sales support and ongoing
assistance in managing key distributor relationships.
Distributor Representatives. Distributor sales
representatives are utilized as a primary
contact point between the end-user and the
Company. Tootie Pie Company has developed
a marketing presentation for in-house distributor
sales meetings and district sales meetings.
For personalized support, the Company conducts
ride-alongs with the individual distributor
sales representatives to assist in the selling
process and maintain client contact for needs
awareness and product feedback.
Tootie
Pie Company Sales Through Wholesalers
Tootie
Pie Company expects to continue to generate
a large percentage of their business in the
highend pie market to come from restaurant
sales through wholesale food distributors.
While the outlook for the restaurant industry
in general was optimistic, as evidenced in
the National Restaurant Association's comprehensive
index of restaurant activity, which posted
a solid increase in overall sales gains. The
Company’s sales regions gave expanded
in the last quarter with existing foodservice
brokers.
Ben E. Keith
 |
During
this quarter a Corporate-wide Marketing Agreement
with Ben E Keith Foods, Corporate Division
and Tootie Pies are now stocked in all of
the Ben E Keith Foods distribution centers,
covering sales regions encompassing: Texas,
Oklahoma, New Mexico, Colorado, Kansas, Arkansas,
Missouri, Louisiana, Tennessee and Mississippi.
Ben E. Keith Food Services was a customer
in their Ben E. Keith Food Services of San
Antonio and Ben E. Keith Food Services of
Dallas/Fort Worth locations. Ben E. Keith
Foodservices of San Antonio and Dallas/Fort
Worth are part of Ben E. Keith Foodservices,
a multi- state foodservice distributor. Ben
E. Keith Foodservices of Dallas/Fort Worth
sells to customers located in West Texas,
North Texas, East Texas, and stretching into
parts of northern Louisiana. Ben E. Keith
Foodservices of San Antonio and Dallas/Fort
Worth both service the Houston, Texas market.
Ben E. Keith has recently expanded its West
Texas Division with a new $40 million warehouse
east of Amarillo which will bolster the company's
ability to ship its products throughout the
state and region.
Sysco Food Services
 |
During this quarter Tootie Pie Co. signed
a new SYSCO Marketing Agreement, Sysco Foodservices
of San Antonio and Austin are part of Sysco
Corporation, a national foodservice distributor.
Sysco Food Services has recently expanded
into East Texas with a new fold-out complex
that is under construction in Longview,
Texas, and is expected to be completed during
the second calendar quarter of 2008. The
facility will hold about 360,000 square
feet of warehouse space and offices and
will serve restaurants, schools, hospitals
and hotels in parts of Texas, Louisiana,
Arkansas and Oklahoma.
U.S. Foodservice
 |
U.S.
Foodservice is in transition in terms of ownership
and was sold for $7.1 billion. This transition
is expected to enhance U.S. Foodservice’s
national footprint through restructuring and
strengthening its capabilities and restoring
profitability. U.S. Foodservice is the second-largest
food-service distributor in the U.S. with
2006 net sales of $19.2 billion.
It distributes food and related products to
250,000 food-service customers, including
restaurants, hospitals, hotels, schools, the
government and other establishments where
food is prepared away from home.
Growth
in Regional Size on the Precipice of National
Tootie
Pie Company’s footprint has expanded
from strong regional to national with the
inclusion in the Neiman Marcus Fall Catalog.
Foodservice distributors continues to expand
their distribution scope of Tootie Pie.
The Company’s superior pies have strongly
demonstrated distribution their ability
to fully participate in “channel opening”
capabilities, thereby providing their foodservice
wholesale partners with products that can
help them, and their customers, differentiate
themselves in the ever competitive food
service business. This makes this a very
mutually beneficial business relationship.
Size Affords Nimble Response to
Market Demands
Tootie Pie Company offers the personal customized
service that is the strength of the small
independent bakery, especially for its retail
and corporate customer, while still providing
these customers with complete quality. Its
small management team affords Tootie Pie
Company the opportunity to make significant
product related decisions that are reflected
in its premium pies, while assessing the
regional differences in demand as it continues
its expansion beyond the state of Texas.
This strength was clearly demonstrated in
the decision to eliminate transfats from
their recipes. This recipe modification
has no impact on taste and quality as evidence
by the continuing placement of Tootie Pies
beyond the modification.
The Tootie Pie Company management team is
small enough to make important decisions,
while at the same time offers experience
that is able to recognize and act on particular
regional trends. The Company is large enough
and sufficiently capitalized to meet the
existing market demands of rapidly expanding
customer base.
Management has already identified the need
to expand its existing capabilities and
has initiated the planning phase for establishing
a new baking facility to allow it to meet
the needs of its growing customer base.
Tootie
Pie Capitalization
Solid Capitalization and Attractive
Multiples
Tootie Pie Company was capitalized with
approximately $1.3 million in private equity
and brought public via the filing of an
SB-2 registration with the US Securities
Exchange Commission, without relying on
reverse mergers – the Company has
only one class of common stock held by all
shareholders (including management). With
a current float of approximately four million
shares and utilizing a cash valuation calculation,
TOOT could be very attractive, from an acquisition
standpoint.
Expansion Plans In Place
Expansion plans are enhanced by existing
leased facilities which can accommodate
expansion or provide for other nearby growth
alternatives. The Company’s business
model embraces a stair step growth strategy,
which targets growth opportunities and avoids
“growth for growths sake”.
Cash Flow Maximization Built Into
Business Model
In terms of cash flow, the Tootie Pie Company
is able to make and sell their pies before
obligations are due for ingredients, which
maximizes cash flow. Sales to their wholesale
distributors provides a positive cash flow
cycle for payment and Tootie Pie invoices
their wholesale distributors when they pick
up the pies at Tootie Pie’s docks;
with typical terms being net amount due
in fourteen days.
Tootie Pie Company management has demonstrated
a solid commitment to their business plan;
which focuses on providing a superior product
through three basic sales channels: retail,
corporate and wholesale. The Company has
been successful at generating impressive
sales through successful wholesale foodservice
companies in a high growth region of the
United States by offering superior products,
backed by an equally impressive marketing
strategy. This strategy helps the end user
recognize the “value added”
benefit of providing their customers with
a superior desert, coupled with a solid
brand and marketing materials.
Twelve
Pie Menu Provides Good Variety for Customer
and Manageable Inventory for Tootie
Tootie Pie Company chooses to offer a finite
menu, so that they can focus on providing
high quality pies for their customers, coupled
with an equally high quality focused marketing
plan. These pies fall into the category
of both a luxury desert and comfort food.
The pies are fully baked and quick frozen,
providing up to a six month frozen shelf
life and a one week, post frozen, refrigerated
shelf life.
Their current menu of twelve pies provides
the Company the opportunity to offer sufficient
variety and superior quality, while providing
their growing range of customers their choice
of pie which meets their customers’
desires, while providing compelling food
profit margins as well. The twelve pie variety
is manageable, both from their current growth
stage, as well as in the manufacturing process.
A fairly limited menu affords the Tootie
Pie Company the greatest opportunity to
expand profit margins by focusing on a select
group of choices.
Their menu includes:
-
- Peach
Pie
- Cherry
Pie
- Blackberry
Pie
- Blueberry
Pie
- Coconut
Supreme Pie
- Lemon
Velvet Pie
- Pecan
Pie
- Chocolate
Pecan Pie
- Buttermilk
Pie
- Tootie's
Heavenly Chocolate Pie
- Pumkin
Pie
Their
current baking facility is located in a high
growth area and has onsite capabilities for
expansion, should the Company be able to negotiate
agreeable terms. However, their current lease
terms provide flexibility in the event the Company
elects to move to larger facilities elsewhere.
Tootie Pie is investigating the incremental
expansion steps it may choose to increase productivity,
cuts costs and provide for ongoing consistency.
A
Big Time for Tootie Pie Company
Since coverage was initiated Tootie Pie Company
has expanded from a local entity to a regional
entity. Tootie Pie Company now has a definitive
national footprint with its inclusion in the
Neiman Marcus Fall 2007 Catalog and its representation
for Fox Home Entertainment in marketing efforts
associated with the DVD release of The Waitress.
The opportunities for expansion at this point
of company recognition extend beyond organic
growth and the reality that Tootie Pie Company
is a potential acquisition target cannot be
ignored.
A company such as Blue Bell Ice Cream has in
its current level a limited growth outlook through
their traditional outlets. A strategic distribution
strategy for an ice cream company would be to
acquire an iconic pie company that is a strong
complement to ice cream.
Nationally there are virtually no large brand
dessert players that deliver the quality associated
with Tootie Pie Company. Sara Lee is wholly
devoid of an upscale brand. Regional dessert
companies would be interested in Tootie Pie
Co. as well.
Groups that own and operate multi chain restaurants
have a keen interest in a premium pie dessert
company.
The food distributors with existing relationships
with Tootie Pie Company are prime candidates
with an interest in Tootie Pie Company: SYSCO
and Ben E Keith have first hand knowledge of
the impact Tootie Pie Company has had in their
existing regions.
Should Tootie Pie Company decide to expand into
the world of individual servings the options
for purchase become exponentially larger.
Acquisition Target?
As Tootie Pie Company gains national recognition
and a national footprint it is wholly within
the realm of the possible to begin to speculate
on if or when this company will become a target
for purchase and what price.
Legal
Proceedings
Tootie
Pie currently is not aware of, or a party to,
any legal proceedings. Additionally, their officers
and directors, in their capacity as such, are
not a party to any litigation.
Stock
Based Compensation Plans
Tootie Pie does not have a stock-based compensation
plan; however Tootie Pie has issued stock to
employees and non-employees from time to time
as compensation for services rendered. The expense
recorded for the services rendered was based
on market value of the underlying common stock
on the date the shares were issued. The market
value was determined to be the per share cash
price paid by willing investors near the time
the stock was issued.
Tootie Pie has also granted options to their
directors and officers.
Conclusion
Sales growth, particularly in the wholesale
food service sector, will continue to grow exponentially
for the foreseeable future, with sales anticipated
to at least double to in excess of $1 million
in the current fiscal year. We envision sales
to continue to grow dramatically as the Company’s
distributors begin selling their pies into new
territories and using them to open new distribution.
Growth is expected to continue on a six figured
percentage basis from year to year and year
over year; as well as from quarter to quarter
and quarter over quarter. As a result of expanding
revenues, and a continual improvement in manufacturing
capabilities, Tootie Pie Company envisions continued
improvement in Gross Profit Margins, which will
impact bottom line results in most favorable
terms.
Tootie Pie Company’s products have clearly
demonstrated their “channel opening”
capabilities, evidenced by partnerships with
well established national and regional food
distributors, which will continue to fuel dramatic
sales growth. The fact that so many end users
carry the pies by the brand name, the Tootie
Pie Company is also adding to shareholder value
in the building of its brand.
Tootie Pie Company “TOOT” is considered
to be a VERY ATTRACTIVE growth stock. We consider
this stock a “BUY” and we have a
target price of $3.37 per share near term.
Management
Don Merrill, President & CEO
Mr. Merrill (47) has over twenty years experience
in the capital markets, with an emphasis on
early stage companies and venture capital. He
began his career at Merrill Lynch, a respected
financial services company, where he had over
$200 million under management. Mr. Merrill has
established a successful track record of recognizing
and assisting early stage companies whose business
opportunities represented significant potential
for growth.
Mr. Merrill has provided his expertise to companies
in many business sectors; including specialty
retail, retail distribution, telecommunications,
and high tech communications. Mr. Merrill has
evaluated many young companies and assisted
in raising tens of millions of dollars in both
public and private equity.
Mr. Merrill has been married for over twenty
years to his wife, Cathy. They have three children;
Matt, (18) and Emily and Liz (15). They live
in Boerne, a small community just outside San
Antonio, Texas.
 |
David
Patterson, Treasurer & CFO
As a Certified Public Accountant, Mr. Patterson
has twenty plus years experience in a variety
of industries including public accounting, oil
and gas, commercial banking (including extensive
loan workouts and asset management), not-for-profit,
foodservice brokerage, and other related experience
including consulting in industries ranging from
insurance to oil & gas.
He has succeeded in all sizes and types of organizations
and positions from being an auditor for Touche
Ross, an international CPA firm, to serving
as an accounting supervisor for Tesoro Petroleum;
from serving as a senior loan and asset manager
for Gill Savings in San Antonio to being a senior
loan workout officer and head of the commercial
real estate department for Fleet Bank-New Hampshire;
from being an owner and operator of a start-up
foodservice brokerage company to having his
own Consulting/CPA practice providing services
on merger and acquisitions and contract CFO/Controller
to serving as a team leader for a Sarbanes Oxley
compliance project for Baker Hughes, a large
international oil & gas services company
based in Houston, TX.
Mr. Patterson has been married for thirty two
years to his wife, Denine. They have two boys
Aaron (26) and Ragan (23). They reside in San
Antonio, Texas. His hobbies include golf, singing
and home renovation.
 |
Jeff
Bailey, Vice President of Corporate Development
Jeff joined JPMorgan Chase Bank following his
graduation from Texas A&M University in
May of 2001. Upon joining the bank, Jeff participated
in the Middle Market Analyst Training Program
in New York City. The training program included
the study of market dynamics, financial accounting,
corporate finance and credit underwriting.
Upon completion of his training, Jeff joined
the San Antonio Middle Market banking group
in January of 2002. As an Analyst and then an
Associate, Jeff was involved in underwriting
and extending credit to companies in numerous
industries ranging from $10 million to $1 billion
in revenues. His roles involved research, financial
analysis and presentation skills coupled with
client support and marketing efforts. With these
responsibilities, Jeff assisted companies in
securing financing for capital improvements,
acquisitions and working capital needs.
 |
Bobbie
Keese, Vice President of Baking Operations
Bobbie is the daughter of Tootie Feagan and
has been involved in baking pies with her
mom, off and on, for many years. She worked
and held numerous responsibilities for the
Medina ISD from 1974 to 1982. Following her
work in the school district, she pursued the
personal travel industry, joining with Chaparral
Travel in 1982. In 1987, she and three partners
started a new travel agency in Kerrville,
Texas named dventure Travel, which is consistently
voted the best travel agency in the hill country
each year. Bobbie worked full-time at the
agency through 1998 and maintains her partner
status to date.
In 2001, Bobbie went back to Medina to take
over the full operation of the Tootie Pie
Company while her mother, Tootie, underwent
hip surgery and recovery. She handled all
facets of the business on a daily basis for
one year until Tootie’s return. In addition
to the above she has held positions at Billing
Concepts as an account manager, and as an
insurance agent for USAA in San Antonio. In
September of 2005, Bobbie joined Tootie Pie
Co. to oversee all baking operations and quality
control.
 |
Kimberly
Lee, Sales Director
Kimberly Lee (48) has over twenty years experience
in sales and management with a very diverse
background. Entering the field of Interior
Design and then as a business owner in the
late 80’s, she worked with many prestigious
builders in the San Antonio
and South Texas area.
She then spent a few years at home raising
4 boys: Kody (24), Travis (22), Austin (17),
and Carson (15). While at home, she ran a
child care facility where she kept infant
to toddler aged children.
This lead to home schooling her children over
the next 8 years. Kimberly then had a very
successful home-based business with Pampered
Chef where she earned top sales and recruiting
achievement in the company for 7 consecutive
years. She shared this business opportunity
with others and built a team of over 100 consultants,
while helping them to develop their own businesses
through training and programs.
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were at $50.
Timing of Ratings Calculations:
Equity Stock Analysis calculates ratings each
night after the markets close, which is why
the rating date on our reports will always
be the previous business day.
The text of the reports is modified as market
events warrant—usually about once or
twice per quarter. All stocks covered are
monitored every day, so our ratings are always
current.
Long Term Value Basis of Ratings
Equity Stock Analysis focuses on the long-term
value of businesses rather than short-term
movements in stock prices. Stocks are rated
in a three tier system:
• Attractive
• Neutral
• Monitor
Our rating is anchored on each certified financial
analyst’s estimate of a company’s
“fair value,” which is what the
analyst thinks the business is worth on a
per-share basis.
Our certified financial analysts arrive at
this value by forecasting how much excess
cash or “free cash flow”—the
firm will generate in the future, and then
adjusting that total for both timing and risk.
Basis of Rating
System
Competitive
Advantage
A firm’s ability to earn returns above
its cost of capital in the future provides
it with a competitive advantage. Competition
tends to drive down excess profits, but companies
can earn excess profits for an extended time
by creating a competitive advantage —and
these companies are likely to be superior
investments.
Companies that are low-cost producers are
favored because they create high switching
costs for their customers, or have strong
brands or long-lasting patents. All of these
characteristics allow companies to protect
their competitive position.
Discounted Cash Flow
This is a method for valuing companies that
involves projecting the amount of cash a business
will generate in the future, subtracting the
amount of cash that the company will need
to reinvest in its business, and using the
result to calculate the worth of the firm.
We use this technique to value nearly all
of the companies we cover.
Discount Rate
We use this number to adjust our forecasted
cash flows for the risk that those cash flows
may not actually come to pass. For a very
steady, stable company, we’ll use a
low discount rate, since we can have a lot
of confidence that the firm will generate
the amount of cash that we’re forecasting.
For a firm with a cyclical business and fierce
competition, we’ll use a much higher
discount rate, since there’s much uncertainty
surrounding the firm’s future.The discount
rate may also be referred to as the “cost
of capital.”
Fair Value
This is the output of our discounted cash-flow
valuation models, and is our per-share estimate
of a company’s economic worth. We adjust
our fair values for any hidden liabilities
or assets that a firm might have.
Our fair value estimate differs from
a “target price” in two ways.
One, it’s an estimate of what the business
is worth, whereas a target price is typically
an estimate of what other investors will pay
for the stock. Two, it’s a long-term
estimate, whereas target prices generally
focus on the next six to 12 months.
Business Risk
Based on fundamental factors such as cyclicality,
leverage, competitive strength, and profitability,
we divide our coverage universe into risk
categories.
Unlike some risk ratings, ours is not based
on the volatility of the firm‘s shares,
but rather the predictability and strength
of the underlying business.
Margin of Safety
This is the discount to fair value we would
require before recommending a stock. We require
larger margins of safety for riskier stocks,
and smaller margins of safety for low-risk
stocks.
Consider Buying/Consider Selling
The consider buying price is the price at
which a stock would be rated “Attractive”
and thus the point at which we would consider
the stock an extremely attractive purchase.
Conversely, consider selling is the price
at which a stock would have a “Monitor”
rating, at which point we’d consider
the stock overvalued, with low expected returns
relative to its risks.
Margin of Safety
This is the discount to fair value we would
require before recommending a stock. We require
larger margins of safety for riskier stocks,
and smaller margins of safety for low-risk
stocks.
Consider Buying/Consider Selling
The consider buying price is the price at
which a stock would be rated “Attractive”
and thus the point at which we would consider
the stock an extremely attractive purchase.
Conversely, consider selling is the price
at which a stock would have a “Monitor”
rating, at which point we’d consider
the stock overvalued, with low expected returns
relative to its risks.
Compensation Disclosure
Pentony Enterprises LLC has been compensated
$69,000 and 52,000 restricted shares directly
from the company for profile coverage. Pentony
Enterprises is not a registered investment
adviser or a broker/dealer. Pentony Enterprises
LLC makes no recommendation that the purchase
of securities of companies profiled in this
web site is suitable or advisable for any
person, or that an investment in such securities
will be profitable. In general, given the
nature of the companies profiled and the lack
of an active trading market for their securities,
investing in such securities is highly speculative
and carries a high degree of risk.
Methodology
Equity Stock Analysis’ complete
coverage of a company provides our subscriber
with the fundamentals
of investing:
• Current – We notify our subscribers
immediately of all news impacting our covered
companies.
• Overview – We examine the
big picture and analyze the company’s
fit in the economy;
• Interview – We go to the source.
We interview the CEO and let our listeners
decide based on first hand information.
• Analysis – We use a certified
independent financial analyst to examine
and report on the company’s financials.
• Global – We cover emerging
markets and provide insights into foreign
economies. Executive interviews provide
insightful analysis which includes the tangibles
and intangibles of the local economic, political,
sociocultural, and technological developments
of emerging markets.”
Equity Stock Analysis provides a vigilant
radar by notifying the subscriber with the
information they must have to regularly sharpen
their instincts and keep their sails ready
for any shift in wind direction and credible
opportunities for investment.
Equity Stock Analysis employs a combination
of fundamental and technical analysis in company
evaluation.
• With fundamental analysis, an investor
reviews the history of a company’s
financials, searching for evidence of consistently
good management and the likelihood of ongoing
growth.
• With technical analysis charts are
evaluated which reflect the historical prices
of individual stocks and composite prices
of major indexes, seeking to recognize recurring
patterns and inflection points that signal
when to buy or sell.
Equity Stock Analysis has the experience necessary
to predefine information needs, execute focused
searches to acquire relevant information,
and interpret and integrate financial statement
information that interprets a firm’s
financial information for our subscriber.
Equity Stock Analysis employs extensive information-gathering
strategies and is able to interpret and integrate
financial statement information through a
Certified Financial Analyst.
Equity Stock Analysis employs independent
Certified Financial Analysts whose job it
is to focus on a firm’s financial statements,
especially the income statement and cash flow
statement.
A detailed discussion with management precedes
this analysis by Equity Stock Analysis in
order to:
(1) define the objective of the analysis;
(2) define relevant information;
(3) acquire relevant information from a
credible source;
(4) evaluate acquired information;
(5) assimilate information with prior knowledge
to form judgments;
(6) make a decision based on judgments.
This approach maximizes the subscriber’s
ability to make the best investment decision
possible.
The discounted cash flow model used to derive
the price target for Tootie Pie Company was
based upon guidance provided by company management
with regard to sales and revenue forecasts.
- End -
Copyright
2007 by Pentony Enterprises LLC. The report
and all of its contents are the property of
Pentony Enterprises LLC. No part of this publication
may be reproduced in any form or by any means
without the prior written permission of Pentony
Enterprises, LLC. For any permissions, please
contact our CEO, John Pentony by email at:
john@pentony.com.
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