Saturday, January 22, 2011

(OTCBB: SPIN) Spine Pain Management - 2010 recap, 2011 outlook...

I put out SPIN as a stock to watch last week on twitter.. the stock is up 37% since the alert.

Here's why I still feel like this company is HUGELY undervalued and poised to explode when the anticipated news is released in the coming weeks...

Recent Price: $0.80

Current EPS: $0.08

I/O Shares: 17,000,000 approx

Conservative multiple of 20 would put this stock at $1.60 (up 100% from todays levels) based on what the company did in 2010... 2011's outlook should bring the price much higher.

SPIN did $6.55 million in gross revenues for 2010. And before adjustment for extraordinary non cash charges, income of $1.29 million. Or about .08 per share. The revenues were derived from 12 months operations from the Houston Clinic and only six months from the McAllen TX Satellite Clinic.

Clinic growth is only being limited by available cash flow. From organic cash flow alone, SPIN should be able to add an additional two to three full clinics this year and more then double revenues and increase earnings to .20+ per share for 2011.

The Company has no interest in selling shares since the stock is so undervalued so it is investigating various forms of debt financing which now is becoming more easily achievable due to its track record of 16 consecutive months of history, each profitable. Should the
Company be successful in this raise growth would increase dramatically.

The current discussion is to raise approximately one million straight debt
with a 10% interest rate. If they are successful in raising this, then a
total of seven to eight new centers could be opened this year raising
revenues to approximately $30 million and earnings per share up to $.55-.60
for this year. With the million in financing, but no additional, the cash
flow from these 10 centers would then be sufficient to add an additional
eight centers in 2012 which in turn according to the Company's business
model would increase revenues to approximately $70 million in 2012 and
earning per share to the $1.05-1.10 level.

Bottom line is the Company should easily grow at a minimum 100% compound
rate without financing and could double that with the financing for at
least a few years. This type of growth should demand a PE of at least 30-40
times earnings once recognized.

Please do your own research: