david travis:
Partially off topic since the latter half about valuation is definitely on topic. All the following is in my opinion.
Let me say at the outset, I was not responding to you yet you interjected with a flame. Read the terms of use. Second, I no longer believe you are the real david travis, in part because I can discover no other instance on SI where the principal in a brokerage house has shown up to defend the merits of a stock. Whoever you are: I must commend you again; that was an ad hominem attack at its finest. (For those of you who don't know, ad hominem means "against the man," an illegitimate debate technique when one cannot debate facts). Permit me to address your points one-by-one.
Your post came in the middle of the day (the trading day also I might add)...
The implication, via the parenthetical (the trading day also I might add), is designed to imply that somehow I am in league with Mr. Goldfinger to manipulate the market (assuming for the sake of argument that any attempt is going on). The implication is designed to impugn my integrity and deflect consideration of what I admitted to be a rudimentary analysis. A very questionable tactic since, I reiterate, the very first factual confirmation of a patent, ANY patent, was discovered and posted by me. (See post 424). However, lest there be any doubt, please note the time of this post. The market is closed.
You questioned me on my post "can't accept at face value" and never once sad anything about the lies from BUTTFINGER, is it OK to use that Batman?
Let us examine how I responded to you here. exchange2000.com
I commend you; all in all, a class response to tough questions. While I cannot say that I accept at face value your answers, some of my concerns have been assuaged. On those outstanding, absent new facts there appears to be legitimate grounds for disagreement.
In the first sentence I compliment you. In the second sentence, I admit that you have swayed me in some matters. In the third sentence, the phrase "on those outstanding" references "concerns which have not been assuaged," i.e., those not taken at face value. By saying absent new facts, I am accepting you answers for the time being.
By going on-and-on about "face value," you have committed the exact same error that you are bitterly complaining about regarding the unfavorable article written by the reporter. Specifically, you have taken quotes out of context and distorted them for your own purpose, turning compliments into rebukes. Practicing for a second career in yellow journalism?
As to the substance of not accepting things at "face value," let me ask a simple question. When an accounting firm does an audit, do they accept the statements of management at "face value." When an appraiser certifies a valuation, does he accept the 3rd party statements as to asset value at "face value" or is a physical inspection made and comparable sales analyzed? When a chartered financial analyst issues a research report does he accept corporate spin at "face value" or does he do some sector analysis. They accept nothing at face value because they have a fiduciary responsibility and material omissions or lack of due diligence can impose legal liability. No principal in a brokerage firm would ever imply that an investor should take less care.
As to the numbers I posted, lets get into that. You wrote: With a market of 300,000,000 new engines and a replacement market of BILLIONS of engines your annual figure of 235 million is very small.
You went on the attack but provided ZERO data except the foregoing. (Please go back and check you figures; is that for the NAFTA countries alone?) Now, go back and re-read my post: the 235 million is not an annual figure; it is a twenty year figure. How did you make such a simpleton's mistake?
Moreover, first you imply that
1. By posting my quick numbers, I was casting doubt on the market cap of AENG; yet those numbers justified the market cap. (My conclusion was whether the MARKET would accept those values or whether management could execute.)
2. Yet, using your market size and my math, the market cap is way too low.
What are you saying??? I think the phrase talking out of both sides of your mouth at the same time applies.
A real principal in a brokerage firm would not reacted in this manner. Such a person knows that the market is just the collective judgement of all buyers and sellers as to the prospects of a firm. I believe it is worth x, you believe it is worth y. Absent that collective tension regarding valuation (along with the need for liquidity) the market would not exist.
Finally, lets go back to what you wrote to me in exchange2000.com
As with any new venture the initial valuation was arbitrary. The answer to your second part is no. Having had discussions with various sources the numbers came back higher than I ever expected.
This is a BS. The initial valuation was arbitrary? To clarify, you did no research into the value of the intellectual property rights until after you bought in. Are you serious? You put up you own hard earned money without any research into the value of what you were buying? Now you say you have some idea what it is worth but you won't tell. Well if my rudimentary math is way too low, tell us now. What is your 12-18 month target price for this stock?
This poster makes errors which are too amateurish. The bluster is too juvenile. Furthermore, this poster knows less about finance than a 3rd year undergraduate. Doesn't know what present value is, doesn't recognize future value. Heck, the real david travis would have learned it by osmosis.
Anyone want to get into a serious discussion about finance? We can discuss:
1. Total market size.
2. Distribution of total market by displacement and type of engine.
3. Market Share.
4. Royalty rates.
5. Operating expenses. (Including litigation expense to defend the patent because inevitably someone will attempt to infringe it)
6. Working capital requirements
7. Tax rates
8. Weighted average cost of capital.
Of course, a brokerage could issue a research report. Or possibly, the company could commission a report by one of the penny stock rags for $50K. Of course, for that price (if more, not much more) you can get a big 6 accounting firm to do an ASA (American Society of Appraisers) certified appraisal.
BTW, you may wish to research these two Australian companies with patented improvements to the internal combustion engine.
orbeng.com.au
splitcycle.com.au
While they do not appear to have the same potential as the "Axial Piston Rotary Engine" (assuming we ever get some independent testing), they do provide insight as to how long it takes and how much it costs to bring a CONCEPT to commercial viability. Then we can have a real discussion about revenue ramp and market share.
Oh, and finally "david", my credentials concerning valuation are already a matter of public record (in the legal venue).
Have a nice day.
ww |
