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Combined GSI Group + Excel Review. Dr. Rama Rao RRCM.COM. Combined GSI + Excel. Reshaping Laser Industry Solid Historical Performance Market Valuation of Profitable Laser Companies GSIG Stock – most undervalued Assessment of Fair Value of GSIG Great Opportunity

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combined gsi excel
Combined GSI + Excel
  • Reshaping Laser Industry
  • Solid Historical Performance
  • Market Valuation of Profitable Laser Companies
  • GSIG Stock – most undervalued
  • Assessment of Fair Value of GSIG
  • Great Opportunity
  • Internal Growth Opportunity
  • External Growth Opportunity

Dr. Rama Rao

RRCM.COM

solid historical performance of gsi excel normalized annual sales of 450 m with net income of 30 m
Solid Historical Performance of GSI + ExcelNormalized Annual Sales of $450 M with Net Income of $30 M

Dr. Rama Rao

RRCM.COM

market valuation of profitable laser companies
Market Valuation ofProfitable Laser Companies
  • Most Profitable Laser Companies trade at Market Valuation ≈ One Time of Annual Sales (P/S =1).
  • The combined company of GSI + Excel is an exception! Trades at 1/10th of its annual sales.

Dr. Rama Rao

RRCM.COM

gsig stock price most undervalued
GSIG Stock PriceMost Undervalued
  • The combined company of GSI + Excel has outstanding shares of 41 M.
  • The stock trades at $1.
  • Market Valuation of $41 M.
  • The combined company has normalized annual sales of $450 M with net income of $30 M
  • GSIG trades at P/S ≈ 0.1 and P/E ≈ 1
  • GSIG paid $350 M cash for Excel ($32/Share)
  • GSIG has $96 M in CASH ($2/Share)

Dr. Rama Rao

RRCM.COM

gsig stock recent performance last year this year
GSIG Stock Recent PerformanceLast Year & This Year

Acquisition of Excel

Year to date

Dr. Rama Rao

RRCM.COM

fair value assessment of gsig stock
Fair Value Assessment ofGSIG Stock
  • Market Valuation should be one time of annual sales as other peer profitable laser companies.
  • The combined company should have a market valuation of ≈ $450 M (P/S =1).
  • GSIG should trade at ≈ $10/Share with 40 M shares outstanding.
  • This is the kind of stock – what Peter Lynch calls: “10 Bagger”!
  • Risk/Reward Ratio: 1/10

Dr. Rama Rao

RRCM.COM

great opportunity game plan
Great OpportunityGame Plan
  • Take advantage of undervaluation of the combined company (GSIG) for a possible future investment appreciation.
  • Interact with Mgmt/Board in order to enhance the share holders value.
  • The combined company can become a nucleus - $2B industry consolidation – Excel Dream!
  • Established a monopoly in the Laser Industry – control/enhanced gross margins – further appreciation of stock price.

Dr. Rama Rao

RRCM.COM

gsi internal growth opportunity
GSI Internal Growth Opportunity
  • New Products:
      • Fiber Laser/ Disc Laser/ Diode Laser (New Generation – Compact & Efficient)
  • New Emerging Asia Expansion:
      • Asia – China/India – Industrialization (Legacy Products)
  • North America & Europe Market Share Expansion
      • With New Compact /efficient Products
  • New Emerging Applications:
      • Solar Panel
      • Nano Structure/Semiconductor fabrication

Dr. Rama Rao

RRCM.COM

gsi external growth opportunity
GSI External Growth Opportunity
  • Now GSI + Excel with normalized annual sales of $450 M ranks #3 behind Coherent ($600 M) and Rofin ($500 M)
  • Consolidate other small players (ESI : $280 M– semiconductor, II-VI: $280 M – optics, IPG: $180 M – industrial)
  • Strategically buy small niche players with new product & technology – Silicon Valley, China, India etc.
  • Use the Marketing & Sales distribution net work and efficient manufacturing capabilities of the combined company to promote the new products globally.
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