RE: Bruce CampbellAs a follow on to my morning comments about why I think the intrinsic value of BEV has increased since Jan 1, 2003 at a higher rate than the stock which has appreciated by 119%. Some of my reasoning follows (all prices in Cdn$);
The ttm EPS has risen from $0.61 to $0.86 (up 41%) so the P/E has gone from 17.4 on Jan 1 to 26.9 today however it would appear that over the next 9 months the ttm EPS will grow to be in the range of about $1.40 (up 63%). The order backlog is up from $60M to $280M (as of Aug 8 report). The proposed NB facility was just a rumour back on Jan 1 but was confirmed by BEV on Jan 23 in a NR & since approved. The capacity has therefore been confirmed to double with still more possibilities ahead such as Quebec expansion or Kirkland Lake. Having a second functional facility will assist with future permits. Thanks to the storage facility built in 2003, along with the tremendous backlog we can look forward to a steady, predictable earnings stream unlike anything prior to Jan 1, 2003. The Quebec furnace has performed very well during all of 2003 as far as we can tell unlike in 2002. The company has made great strides in getting across to the public the effectiveness of their technology & proven track record, even if they aren't all reading it. The net margins & ROE should grow as capacity utilization grows. Trading volume on both exchanges & therefore liquidity has grown significantly since prior to Jan 1, 2003. We should likely be up for TSX index inclusion before the end of the year which will increase investor awareness & demand for the shares.
Now I suppose one could debate if all that has appreciated the intrinsic value by 119% but my point is that while the stock is up significantly YTD, it still offers substantial upside & solid value at the current price. It was a great buy back on Jan 1 at $10.60 and it is still a great buy today at $23.10. Cheers!!!