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  • astral_tsar astral_tsar Nov 10, 2010 12:26 PM Flag

    what is a realistic growth pattern for this company

    I guess I don't necessarily see a lot of growth in EPS beyond returning to the $0.50 to $1.00 level.

    At that EPS, the ROE would be there for very rapid growth. (Deduct cash from book value & you get about $2.70 capital invested in the business per share. Fifty cents to a dollar is a huge return on that.)

    But I wonder about market opportunities. Margins are good for the space, but I'm not sure they're where they'd need to be to buy share profitably by cutting prices.

    Just my opinion. I'm playing this as a stock that dipped from $10-$20 to $5 on a bad worldwide recession. I'm betting the recession was the only negative factor and that it's temporary. I'd like to hear from people who have ideas about whether that giant ROE can be put to work. I'm certainly willing to take $25 for my shares instead of $12 -- if I can get it!

    • Modest growth, dividend increase, target of $12.

      Per my previous post, liquidation of land and cash was $10, with cash now being a bit more, and the co now profitable. There is now a modest probability that Koo leaves and a private equity buys the company in the next year. I expect to see at least some smoke about an investment bank being involved in at least some sort of negotiation.