KGIC Inc LGLTF

tomorrow night is the up date

[Jamestolley]

understand that Loyalist (LOY.V) will release its financials tomorrow night. Obviously with every second that ticks by investors get more nervous. Again I am confident there is nothing suspicious in the works here but I’m sure the auditors are putting the financials through the wringer.   What’s most frustrating for me is that I know the value of the real estate play which is worth as much as $30 million to LOY. That is, the company can realize $30 million of balance sheet and book value by simply agreeing to funnel its students exclusively to the new housing company. LOY's market cap is $67 million, the company has cash in the bank and has revenues of roughly $70 million/year.    It doesn’t earn much money on those revenues but when you see that it spends $8 million a year on rents and $22 million on overhead in general, you know there’s room for massive cost cutting, which the new CFO, who has excellent credentials, should be able to turn into profits. I reckon this company can make $8 million a year very conservatively. At even an absurdly low 8 times earnings that equates to $64 million in market value. Add the housing value and the stock is dirt cheap.    Still, I’m doing nothing until I see the numbers and have a quick chat with the new CFO. If you’ve sold for a loss, you may be able to buy back cheap to make your money back but wait. The one good thing is that the financial results will reflect any and all bad news. They will take all their lumps in 2014 which will pave the way for easy year-over-year comparisons moving forward.    Accredited investors will get a shot at the pre-IPO housing financing, and all investors, accredited or not, will likely get a stock dividend of the new company from LOY, as well as what I hope will be a bump in the stock when all the smoke clears.