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Gold/Mining/Energy : American Eco (ECGOF, ECX on Toronto exchange)
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To: Harry_Behemoth who wrote (225)7/19/1997 5:56:00 PM
From: VALUESPEC   of 2841
 
The Motley Fool board is not very friendly. However, I look in the SI thread, and I see the discussion is exactly what I am intrested in finding out, regarding ECGOF.

How many shares would there be if all convetibles were converted today (fully diluted number of shares)?

What is the current tax rate? A normal corportate rate is about 40% including state tax.

What would the PE be if you full taxed earnings and divided the earnings by the fully diluted number of shares?

I would be interested in having these questions answered. At $ 8 per share, ECGOF seems too low priced. ECGOF always seems to sell for too little. I suspect that getting the answers to the questions I just asked would reveal a lot.

Also, one should look at the balance sheet. What are the current assets (money for paying bills in the next 12 months) and what are the current liabilities (bill that must be paid in next 12 months). The current assets should be significantly higher than the current liabilities. If they are not, then your investment would sell at a discount. A ratio of 2:1 is considered very safe. However, less than that isn't a nightmare, but it should be 1.5:1 or so.

I plan to answer these questions myself as soon as I get the chance. Discussion on this topic of valuation based on a "true" PE would be appreciated in the meantime. :o)
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