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  • mgs1066 mgs1066 Aug 27, 2013 9:00 PM Flag

    drop dead date - anyone know?

    Seems like you could lend 65 million bucks and if the borrower can't repay you collect mineral rights on like a billion tons of coal? From a lender perspective, seems pretty good.

    Any idea on deadlines? How do I rate this equity - lords only knows.

    Sentiment: Hold

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    • Valuation on VHGI...caveat...the outstanding share count is now 233mn...I was anticipating that below. Authorized limit is 250mn shares. I think this is GOOD as the float was way too low...imagine we get to .50 a share and only 10,000 shares trade a day? We needed some liquidity and the fact that the share price has held up shows there is enough interest to have absorbed the increase. But now we have nearly hit the authorized limit.
      See my valuation below ignoring the 100mn...see the 200mn valuation instead. Thanks, Proft.

      Ok folks, I am in finance, and not an analyst strictly speaking but can do a back of the envelope calculation using what we see on their cash flow analysis at the VHGI site.

      So you have $17mn in pre-tax and depreciation profits for 2013. Assuming a long depreciation schedule, I will consider it not too big a number and will just do taxes at a corp rate of 30%. That gives me a net of roughly $11mn.

      Assuming a 100mn shares out, we have an EPS of .11.

      Stock price is now .08, so we are 0.7x P/E. That is below 1x. Ridiculous.
      You give a conservative 9x multiple for a growing mine business and you have .90 per share.

      That is for 2013. We are halfway done with the year and the more accurate way to value this is to take the next full year...forward multiple. 2014, they are making $30mn before tax and deprec...30% tax rate and we have $20mn. EPS then becomes .20. Multiple of 9, and we should be at $1.80 per share.

      Even if shares out doubled to 200mn shares, near the a/s count, then it would still be .90 per share with just a 9x multiple. But growth stocks often get more and that is excluding any other expansion not yet discussed.

      Again, back of the envelope, but I have us moving up to $1 quick based on the LOW FLOAT.