Fortress Global Enterprises Inc - Class A FTPLF

Analyst Perspective...

[Nighthawk40]

Mitigating Risk:

The conversion of the Thurso mill to dissolving pulp has significantly reduced the risk factor for many analyst and investors.

Interesting that they purchased additional digester tanks to help increase DP production in the future. Paying only 3.5 million for assets that are worth 35 million. They were installed in the same layout from which they were dismantled to reduce start-up risk.

In retrospect, the barrier to closing the sale of additional mills to convert to DP may of been  the conversion of the Thurso mill. The internal cash flow from the Thurso mill will fuel the start-up and operating costs for the other mills.

I too am of the opinion that the two identified mills, which have a total projected output of 300,000 tons of dissolving pulp, will be purchased at a bargain price. However, the real value lies in obtaining the future rights for lumber /"chips" from the Quebec government.

In a tough economic environment, creating potentially an additional 450 jobs and another 3000 spin-off jobs in Quebec is a hugh plus to help FTP close their acquisitions.

Now that the market is aware that FTP can convert other mills to produce DP and have successfully raised an additional 35 million,  now is the time , IMO, to purchase additional shares.

Given the delay in the Thurso mill conversion, 4th quarter results aren't expected by many analyst to be good. The key indicators will be the 1st and 2nd quarter results in 2012.

25 million in government grants will coming on-line for FTP in late 2012 from the co-generation project .

The Dresdan mill should easily offset the under performing Lanquart mill.

When you stand back and look at the big picture, funding in place, acknowledged acquisition targets, reduced new DP coming online, limited competition, high entry hurdles and expected steady global DP growth for the next 5 to 10 years; the timing of the acquisitions is very good.

To date, all of FTP's purchases have been opportunistic and inexpensive....in growing high margin niche markets.

The present imbalance of the high number of short shares is extremely dangerous for short sellers.

There are only 14 million shares and most are owned by institutional buyers. These same buyers most likely were involved in quickly snapping up the 35 million 6.5% offering.

Keep up the excellent posts...

Nighthawk40