I subscribe to Fabrice because he is a fundamental investor who seeks upside from stocks with both growth and emerging strong fundamentals.

 

Such is the case with Loyalist, a unique but very futuristic business that has a very bright future.

A quick examination of recent financials and acquisitions, which have yet to contribute to those financials but will do so fully in 2013, indioates the following.o sales.....

.....LOY will sales of about $14 million in 2012 with net earnings near 4 cents per share

 

.....the most recent acquisitions will add about $9 million to sales in 2013

 

.....organic growth including full contribution of schools acquired in 2012 should, should add another $4 million to 2013 sales bringing total sales in 2013 to about $27 million or very close to double that of 2012

 

........LOY will continue to consolidate this niche thru more accretive acquisitions in 2013, perhaps adding as much as $9 million to the Q4/13 runrate of at least $36 million

 

Net margins hit 25 % in Q3/12. As sales increase and fixed costs diminish as a % of total sales, net margins should increase in 2013 to levels of 30 % or more.

 

In summary, LOY will have at least $27 million in sales in 2013, with net earnings in the order of $8 million or about 7 cents/share.

 

By Q4/13, the annual runrate should be about $36 million in sales and net earnings should be about $12.5 million or about  11 cents per share.

 

Astute investing is always about forward sales and earnings growth relative to current levels.

 

LOY's scorching growth rate should accord it a p/e multiple of at least 15 times net earnings.

 

This would be equivalent to a fair value in excess of $1 on current the current school suite.

Assuming continued acquisitons, fair value should exceed $1.50 at Q4/13 exit earnings rate.