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  • taiwan9000 taiwan9000 Dec 2, 2010 11:27 AM Flag

    what is a realistic growth pattern for this company

    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.

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    • That's kind of my take on the long-term outlook for NTE, also.

      When I last looked (2010 proxy statement), Koo owned 5.3 mil shs (11.7%), IAT RE 5.2 mil shs (11.7%), and Peter Kellogg 5.8 mil shs (13.0%).

      Kellogg was with GS&Co and I believe is connected with the IAT RE holdings as well as with his own. He and Koo have held their NTE shares throughout the entire 2008-9 downturn.

      At one point, Alfred Khan had filed ownership forms for 2+ mil shares. All together (not including Khan), insiders own about 36% of stock
      outstanding of 44.8 mil shs.

      I think Koo will get sales back to the roughly 800 mil level of years 2005-7. At that point, valuing revenues at 80 cents/dollar of sales gives the company a going concern value of 640 mil or 14/share. Add back $5 for cash in bank and you get a 19 or 20 dollar stock.

      When NTE was last at 800 mil in sales, cash dividends were substantial: 1.32 (2005), 1.52 (2006) and .84 (2007). With cash at 5/ share and no debt, I think Koo will pay out most of earnings in dividends, which should at least reach a dollar/shr.

      And yes, given Koo's age and Kellogg's presence, I think a corporate transaction is likely.


      I am long NTE.

    • Ok and I feel 12ish too. And I usually sell too low -- if NTE keeps zooming, it might attract the poor wretched momo people and then who knows?

      But ... can I ask how you get such big numbers for the leases?