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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (25810)1/25/2007 4:49:44 PM
From: a128   of 78717
 
Yes, they are having serious liquidity issues. Thus the "going concern" statement by the auditors.

They are cash poor but land rich.

It bothers me that they keep having to pay fees to the bank to extend their due dates because the loan is as secure as can be.

The LAND is worth $15-30 million which is $4.11-8.22 per share.

And they have other book value of about $1.25 per share.

And, I think its possible that they return to profitibilty within the next year to 18 months when the state of Virgina gets their act together regarding infrastructure spending.

The biggest concern to me is the possibility that their NOLs will not be usable for their real estate gains.

If they sell all their land close to DC, they would likely buy more in a lower cost area but it wouldnt be as much as the proceeds which means they might have to pay a big chunk of change to the government or buy real estate for income.

This is both an asset play and a turnaround play.

The questions are WHEN they return to profitibility and WHEN they sell the land and for how much...net.

Time will tell.

I suspect that they may deregister to save some on the $140k per year in auditing fees they now pay.

But they have over 400 shareholders of record and not many odd lot holders so a simple odd lot tender offer isnt going to get them under 300.

That may mean a reverse split. Something Im not terribly fond of.
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