There are key events with which investors should view as catalytic events for these shares. Going forward, we expect the following milestones:
- Significantly higher gross and net income as LIGA profitably sells some holdings in its real estate portfolio.
- Closing of First Run transaction and merger with SuiteMagic.
- Raising status to fully reporting company with trading on a more prominent exchange.
- SuiteMagic S-1 filing.
- Additional distribution(s).
- Varied business development transactions.
Valuation and Conclusion:
As noted in our initiation report last month, LIG Assets, Inc. is the classic example of a passive financial services and investment company that routinely converts limited risk capital into substantial cash flow and income. Yet, this unknown, low-float stock is trading around .4x book value when it should command a major premium to book value.
Operationally, wWe expect that the Company will earn at least $5 million in net profit, which equates to $0.07 per share, and is inexplicably 50% higher than the current stock price. What makes the LIGA story so amazing is that if LIGA only earned $3.0 million, or $0.04 per share, it would still be the king of asset plays.
It is important to note that our forecast is derived from multiple revenue and income streams, ranging from real estate transactions, the SuiteMagic minority interest, and the storage facility business line. As a result, we believe that this diversified portfolio should raise investors’ confidence in this estimate.
We continue to rate LIGA a Speculative Buy with a $0.50 price target and plan to provide a more comprehensive pro forma projected income statement in future quarters..
Analyst: Robert Goldman
Rob Goldman has over 20 years of investment and company research experience as a senior research analyst and as a portfolio and mutual fund manager. During his tenure as a sell side analyst, Rob was a senior member of Piper Jaffray's Technology and Communications teams. Prior to joining Piper, Rob led Josephthal & Co.'s Washington-based Emerging Growth Research Group. In addition to his sell-side experience Rob served as Chief Investment Officer of a boutique investment management firm and Blue and White Investment Management, where he managed Small Cap Growth portfolios and The Blue and White Fund.
I, Robert Goldman, hereby certify that the view expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this research report.
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