Tripple Gee

I read somewhere that Tripple Gee was going to make money for investors and I have decided to take a closer look at it to determine the viability of this company.

Tripple Gee is one of the two active companies under the Computer and Office Equipment Sector of the NSE. The other one is Thomas Wyatt. Other companies under the sector, which are, well, moribund are Atlas Nigeria, Hallmark Paper Products, NCR Nigeria and Wiggins Teape.

The 3rd quarter results, for the period ended December 2007, revealed that they were able to grow their turnover by 44% from N419.5 million to N604 million, while their profit after tax jumped from N33.3 million to N71.55 million within the same period, which signified a 115% rise. Their year end is March 31, 2008 and they have about 314 million units of outstanding shares, according to the NSE. I assume that it has not changed because there has not been any news of a share reconstruction, rights issues or public offer in the media.

Based on that result, their 3rd quarter earning per share comes to about 23K while their forward price earning ratio at the current price of N17.50 is 135x. I believe that the fair value of Tripple Gee should be about N9.20 and that is a speculative value as I did not put any form of safety margin into consideration. Even though this company may release a superb results for their year end and help push up the price just a little, I doubt that it will be fantastic enough to justify the current price in the market.