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Penn Virginia Corporation Message Board

  • lareno51 lareno51 Apr 16, 2000 7:30 PM Flag

    Timber assets

    I understand this co has substantial timber
    landholdings in addition to their oil,coal and gas holdings.
    Can someone provide me an estimate of the value or
    nature of their timber assets or the timber acreage?

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    • I think their timber only generated around $1
      million in revenue last year. I might be wrong, but you
      can check the annual report (just came out). However,
      it's almost all profit since they don't do the actual
      harvesting -- the $1 million is simply a fee for the use of
      their land and timber. Double check my number, I'm not
      positive. In any event since most of this is profit you can
      value as it's true EBIT. I'd say it's worth around
      $6-$8 million, or $1/share at best. Like I've said in
      the past, it's not the NSC stock or the timber, it's
      their natural gas and coal reserves that make PVA a

      PVA held up well Friday. Probably because
      none of the momentum crowd, or followers, own it.
      Obviously, this is why PVA didn't do anything last year
      either as the NASDAQ flew up 86%. I'd expect our PVA to
      continue to hold up well with their 5.5% dividend and
      strong earnings outlook. We're still selling around 8x
      this year's earnings, so our low valuation should
      protect us as well.

      My boring small cap value
      stocks have done very well during the storm. Finally
      some justice in this hype driven market. Don't worry
      if you own the tech stuff, I'm sure CNBC, slick
      willy, Abby and the gang will paint the tape and try to
      reinflate the bubble. Like usual, PVA will just sit there
      even though they're making money hand over fist.
      Sometimes (especially Friday) it pays to be different and
      think independently.

      I think earnings will be
      out late this week or early next.

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