Fortress Global Enterprises Inc - Class A FTPLF

RE: Analyst Perspective...

[jjsto]

It seems to me that the analysts who lowered their price targets for ftp and/or switched to a "hold" rating, did so primarily on: 1) The uncertainty regarding recent and near term DP price volatility, 2) general economic uncertainty (europe), and 3) the risk that the counterparties will not honor the hedges.
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The problem with the first 2 factors, in my opinion, is that should if you wait until DP prices are stable and strong, and the economic outlook is rosy, the share price is likely to be well above todays levels.  To paraphrase Buffett, "you pay a high price for a cheery consensus."  As for the third factor, it seems like Chad did due diligence before putting the hedges in place.  How likely is it that a large rayon producer would back out of a 5+ year hedge at year 0, due to short term price volatility?  If the counterparty did back out, who would be willing to sign forward contracts with them in the future?  I dont know what the probability is that the hedges stay intact with no adjustment whatsoever, but the market seems to be pricing in a 100% probability that they get broken. 
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Nighthawk, I think your post "sums up" the big picture quite nicely.  The Thurso plant has started production, and they were able to raise 35m in an oversubscribed offering with a conversion price 40% above the current share price.  That's a great week as far as I am concerned.  The current cash on hand plus the revenue from Thurso will be used to fund the next conversion that is in the pipeline.  All the news from Dresden points to a year that should be at least as good as last year.  Landqart has problems, but if the new orders help stabilize the situation by the 3q or 4q of next year, that will just be icing on the cake.   Operationally, they seem to be executing about as good as possible given the environment.