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08.10.09 TimelessWealth.net features due diligence material on undervalued investment: Wireless Age Communications, Inc. stock symbol: WLSA.

Dear Subscriber,

This evening’s study will be dedicated towards our undervalued investment opportunity, Wireless Age Communications, Inc., stock symbol: WLSA. As we’ve stated, solely based on their waste to energy plasma gasification project in Port Hope, Ontario, the fair market valuation would be $0.69 per share, a potential return on investment (ROI) of 411% based on Monday’s trading session’s close ($0.135). We emphasize the valuation and potential ROI will appreciate in value as Wireless Age Communications’ United States based projects are announced. Our fundamental topic of study, this issue, will be valuation analysis, and market capitalization. Please review the “archive” section of our website (click here) to comprehend how we have organized to distribute due diligence material on our undervalued investment idea: WLSA.

Fair Market Valuation.

Quality investors seek undervalued investments based on fundamentals such as earnings (revenue and sales), and growth (projections). By applying the net income (revenue less all expenses) and dividing amongst total shares issued & outstanding, we derive earnings per share (EPS). EPS is the value that the company has created as a result of strong and successful operations. Every company belongs to a sector or industry. For instance, Wireless Age Communications, Inc. will belong to “diversified utilities” once operating as a renewable energy company. Diversified Utilities has an average P/E (price to earnings) ratio of 9.5. Source

A “P/E” ratio is obtained by dividing the price per share (market price) of a security by the earnings per share (EPS). The equation for calculating P/E is the following:

P/E = PPS/EPS.

What this means in the context of the diversified utilities sector is that on average, securities trade 9.5X their reported EPS. Therefore we use this P/E ratio (9.5) as a “multiplier” to determine a fair market valuation for Wireless Age Communications, Inc. as their earnings are based solely on their project in the renewable energy sector (The plasma gasification project in Port Hope, Ontario).

Wireless Age Communications, Inc. projected net income of $2,000,000 based solely (stress on “solely”) on their plasma gasification project in Port Hope, Ontario, in cooperation with Sunbay Energy Corp. Source

Wireless Age Communications, Inc. also reported debt reduction via. cancellation of restricted common stock. Resultantly the transaction will create greater shareholder value as the issued and outstanding is reduced to 27,600,000. Source

Following our outline (above) we can obtain the conservative (stress on “conservative” EPS by dividing the projected net income by the total issued and outstanding:

EPS = Net Income/Total Issued & Outstanding.

Now we begin substituting our known figures (above) into the equation.

EPS = $2,000,000/27,600,000
EPS = $0.0725

Value investors also consider companies with low P/E ratios undervalued investment opportunities. Given Monday’s trading session’s close ($0.135) Wireless Age Communications, Inc. would have a P/E ratio of less than 2:

P/E = PPS/EPS.

Now substitute known figures into the equation:

P/E = $0.135/$0.0725
P/E = 1.86

Take Wireless Age Communications’ P/E ratio of 1.86 and compare it to the industry average at 9.5. Value investors would use this calculation to clearly explain how Wireless Age Communications, Inc. is undervalued. Now you can see why P/E ratios are important tools used for fundamental analysis.

Where should Wireless Age Communications, Inc. trade given it is undervalued at $0.135? Here our fair market valuation is established. The universal formula used to determine fair market valuation is EPS multiplied by the average P/E ratio of a securities’ respective sector:

Fair market valuation = EPS X P/E (known as a “multiplier” in this sequence).

Now substituting known figures into the equation:

Fair market valuation = $0.0725 X 9.5.
Fair market valuation = $0.69

Start-up or development stage companies positioned for rapid growth are often excused with higher P/E ratios. That is why with a P/E of 9.5, we consider this valuation “conservative”. Another key to remember is that this calculation is solely based on Wireless Age Communications’ project in Port Hope, Ontario. We expect the valuation and potential ROI will increase as the company reveals financial plans for their projects in the United States.

Market Capitalization.

Market capitalization (also known as “Market Cap”) represents the collective value of a company or stock. It is obtained by multiplying the total number of shares issued and outstanding by their current price per share (market price). The universal equation:

Market Cap = total number of shares issued and outstanding x current pps.

In context with Wireless Age Communications, Inc.:

Market Cap = 27,600,000 x $0.135
Market Cap = $3,726,000.

TimelessWealth.net assembled a list of 14 competitors in the OTC market. The key to comprehend here is that virtually every renewable energy technology is in competition with one another. We offer you the following table to illustrate how companies in and around (some further along, some lagging behind) the same stage of development as Wireless Age Communications, Inc. have significantly larger market capitalization.

The average market capitalization among competitors is $36,132,500. Based on 27,600,000 as the total issued and outstanding (once the cancellation of restricted common stock takes place), Wireless Age Communications, Inc. would need to trade at $1.31/share to meet the average amongst competitors at the same level of development.

We encourage you to visit our website regularly for updates, due diligence materials, and current publications. We remind you that subsequent newsletters containing due diligence materials will be titled, “TimelessWealth.net features due diligence material on undervalued investment: WLSA (Part #)”. In the next few editions we will be discussing key partnerships & their role in establishing Wireless Age Communications, Inc. as a successful venture; Plasma gasification technology & the solution it offers several crisis political and environmental issues; Financing & the party that will provide the necessary capital to developing this project, and more. All the best.

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