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A O Smith Corp V.AOS


Primary Symbol: AOS

A. O. Smith Corporation applies technologies and solutions to products manufactured and marketed worldwide. The Company operates through two segments: North America and Rest of World. Both the segments manufacture and market a comprehensive line of residential and commercial gas and electric water heaters, boilers, tanks, and water treatment products. Its Rest of World segment is primarily comprised of China, Europe, and India. The North America segment serves residential and commercial end markets with a range of products, including water heaters, boilers, water treatment products, and other. The Company also manufactures expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, related products and parts. Its Lochinvar brand is a residential and commercial boiler brand in the United States. Its water softener branded products and problem well water solutions include the Hague, Impact Water, Water-Right, Master Water, Atlantic Filter and Water Tec brands.


NYSE:AOS - Post by User

Bullboard Posts
Post by vindaloo_u2on Apr 12, 2008 10:43am
443 Views
Post# 14964693

extrapolations

extrapolationspatch will be announcing either a partnership or most likely a buyout in the coming weeks.  Looking at their stock price, .40cents looks solid and the ceo has bought recently as high as .65.  Assuming the buyout is at least .50 cents (conservative estimate), that brings a market cap (FD) of around 25million (US) for 119 million contingent resources.  They hadn't the funds for drilling this season and this resource figure will stay as is.  AOS on the other hand, currently has about double the contingent resources of  patch (and 4 times the in-place volumes) with a massive exploration program this past season behind them.  It should also be noted that the last release stated an average of 4 holes were drilled per section.  This is very significant as it will allow them to declare 'reserves' for these sections as opposed to resources.  Taking patch's very conservative buyout estimate and calculating AOS's current value (ignoring everything but contingent), you get about .80 cents...a healthy distance from the .56cents it currently trades for.  The soon to be buyout of patch will finally put a current figure on contingent value, one that should pop aos by nearly 50%.  Once results from the drilling season are released, we could see valuations soar due to the massive increase in contingent and the upgrade for many sections to 'reserve' status (selling at about a buck a barrel).
Bullboard Posts