OTCPK:MGMXD - Post by User
Comment by
materialsgirlon Mar 28, 2015 12:53pm
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Post# 23572749
RE:Patience will reward?
RE:Patience will reward?Newstock;
You quite correct about the company being hard to evaluate. You even have to dig to get a handle on what the Revenue is due to the twin reporting systems (compliance with the law). Then you have the odd one time hit and you have to wonder how frequent these hits will be.
You also said
if you think this company was worth less than what it is trading for then patience will be rewarded
I know that you meant the opposite; the words just got juggled around.
But the point remains that there is a question about what the company is worth. If it is hard to evaluate, as you stated, then we do not know what it is worth. Analysts have mostly been completely wrong since forever. One trap is this. Assuming operating profits are reasonable at $10m to $15m per year pretty soon. Then we also know that the company will partially develop properties on an ongoing basis. We know that some of these will be abandoned due to political decisions by governments or due to permitting or if due to all kinds of things. Theoretically if the company had to take an average writedown of $10m or $15m per year in non-operating write-downs the NAV of the company is zero. Absolute zero. Of course, in the long run, if growth ended, then these write-downs would also end and so some value could be restored.
I own shares so I have no wish to be negative about the company. We just have to be realistic that we know that management people are smart and working hard BUT they have not yet proved that they are conducting a good business. They get this feedback daily. Hard evidence in the form of the share price. That price is the judge, the final arbitrar (is that the right word)
Those of us who continue to hold shares are simply guessing / hoping / praying that the men and women at head office will turn this into a real business. Real business means real cash flow, real profits and a real dividend.
We can see pointers, hints, indications, positive happenings that good things will happen by 2017. But we must be practical and realistic that the market (investors) is so far very pessimistic about Alterra management (see share price for irrefutable evidence). The market is the judge as always.
mat