DIGG at $15.87 per share! Read the PQL analysis below:
I've been seeing a lot of activity on DIGG boards across the internet tonight. I'm happy to see the interest is finally perking up.
Today the stock printed record volume of about 485,000, and I've seen some posters looking for anywhere from $30 to $100 prices on this stock. Rest assured, I'm not here to convince you of those targets, because I'm likely not convinced myself just yet.
However, I do believe that at the current ask of .30, there is substantial upside, and I've put together some thoughts on why I think DIGG could someday be $15.02. Much of it relies on my belief that DIGG has a 1% or greater ownership interest in the yet-to-be disclosed 'PRIVATCO', which DIGG claims owns 800M-1B barrels of oil in the green river formation. Even if you were to invalidate that belief, I still think you can argue the remaining $2.02 as something quite reasonable:
There ARE things about this company you CAN verify. It's not easy. You have to, so to speak, 'DIGG' for information and put considerable time into it. I have verified a majority of what the company claims, at least in principle. In some instances i have made phone calls to people close to the situation. Some of them have contacted me from my website, as i'm the only real outlet 'covering' DIGG right now. I recently became in contact with a consultant of DIGG who has a phd in experimental physics who is apparently on board with DIGG's renewable energy platform. He wouldn't give me any details (and i'm not sure if i'd understand them if he did), but he basically did tell me a little bit about DIGG's wind technology, and my impression from the call was that the company was active in solar and biodiesel as well.
The market cap of DIGG is $10M or so right now. A pure-play solar stock, XSNX, is well over a $200M cap with zero revenue and a product they arent ready to market yet.
So let's assume if DIGGs renewable aspirations are worth $25M alone ($.67) - which should seem reasonable considering their peers. That's a tenth of XSNX, who besides having a bulletin board listing and some great PR, has little tangible evidence of their worth.
In a previous message, I've already identified why the oil shale interests they have could be worth $13/share (with a single 1% interest in their partner's 800M-1B barrels of oil). Search for it - it's message 281 dated March 6.
Then you've got their fuel cells - which of course have applications in the automotive and energy markets. What's a fuel cell concept worth? Many years ago, ballard power received $300M in investments from daimler and ford for their fuel cell tech - which obviously was a flop and several generations behind what DIGG and its partner currently have.
Here is the link to the Ford/GM/Ballard Deal. It appears they each invested at least $69M in CASH plus a lot of other stock stuff, and they were each just getting snippits of the company:
harc.edu1
At the time, Ballard (BLDP) was about $50/share. A month ago, the stock traded at $3. Quite a big loss for Ford/GM, huh? (no wonder why these guys can't stay afloat!). For the record, BLDP has rallied of late, and is trading at a modest $9.93, still a fraction of the levels GM/Ford invested in them. Still, it was important to see this relationship to see the real value of a fuel cell technology to some of these auto makers.
So let's establish that a middle of the road fuel cell product might garner a $50M company in modern times ($1.35).
The waste to fuel plants are interesting. I found a company on the pinksheets that seems to ONLY do waste to fuel stuff. The ticker is IPWG, and they are an .85 reporting pinksheet with a $260M market cap. Oh, and their revenue? As of FY2005 it was approximately $0.
finance.yahoo.com
Let's again say that for whatever reason, DIGG should be valued at just a tenth of a peer. That would give DIGG's two plants, in St. Louis and Vietnam, a value to the company of $26M ($.70).
The ultracapacitor stuff I really dont have a good grasp on in terms of their market or their products available. I do know they partnered with the ICCU out of the Netherlands, and that they appear to be quite respectable from the research I've done. I'd simply guesstimate this subsidiary as sort of a 'generic technology company' and give it a $5M market cap. After what we've displayed with some other peers, hopefully you agree this is more than conservative. That prices the ultracap at about $.15.
Put the pieces together:
Renewables - $.67/share
Oil Properties - $13/share
Fuel Cell Tech - $1.35/share
Waste to Fuel - $.70/share
Ultracapacitor - $.15/share
That's $15.87 per share! As I identified earlier, even if I am incorrect in my belief of the value of the interest in the oil plays, there is easily a couple dollars of value in the stock. The stock still trades circa a $10M market cap. I think everything is discounted at this point. It trades in line with a technology pinksheet that's stuck in one sector and may or may not have any meaningful revenue. There are pharma and drug stocks that trade at $50M caps without a product out of phaseI trials.
Risk/reward should be the key here. But keep in mind this is PQL 'Research' and not PQL 'Trader'. I've said several times trading is NOT my forte and I've already been in DIGG for six months myself. Nothing happens overnight, but I believe something big will happen here, and it won't be a move of two or three cents, but possibly two or three dollars. The potential remains, and believe it or not I'd rank this stock up there with Texas Prototypes as one of those you can actually sleep with at night.
An investment of $100 at .30 purchases 333 shares. If my $15.87 estimate is reached.. even within a year, the return would be approximately $5,284 from that $100, or 5,184%.
I am not saying it will happen. I'm saying it *could* happen, and I've tried my best to explain why I feel that way without the useless pumping and hype you might see from other sites about stocks they follow.
Even a stock that *could* gain 5,184% should be one worth watching.
I hope this explains my position to those of you who have recently sent me some emails about DIGG and to whom I haven't responded before today.
I will update the DIGG profile on the website within the next couple of days with more detailed information on each of their subs.
I currently own 12,300 shares (i didn't sell any, just a miscalculation between the three accounts I have DIGG in) at .29/average and have never been compensated by DIGG to provide coverage of their stock.
Regards and Best of Luck,
Tim / PQL Research |
