Fortress Global Enterprises Inc - Class A FTPLF

RE:valuation exercise

[Contrarian333]

Hi - I've used a lower assumed production (175,000) for conservatism, higher costs, lower dp price, etc and followed it through all the way to free cash flow which I gave both a 5% multiple (again, highly conservative) and a more aggressive 15% cap rate applied to cash flow. This resulted in a price range of approx $6 to $8. I would say your rough calculation is certainly in the ballpark and as you noted - DP prices will at some point catch a cyclical upturn at which point the share price could be much much higher. All of the companies in the sector appear to be depressed in price right now but none more so than FGE. At the right point in the cycle, due to the fact that it is now a one mill company, I think it is an easy bolt on for a competitor (particularly with the new technology). I'd like to capture such a control premium in a backdrop of higher dp pricing. Stock is tightly held. I think I know where about 70% of it is. Price weakness due to retail flow I believe. Could be a $15-25 stock in the right circumstances.