Napier International Technologies Inc. (T.NIR) Message Board

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Gold/Mining/Energy : Napier International Technologies Inc. (T.NIR)

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To: xray who wrote (682)	7/2/1998 2:17:00 PM
From: David in Ontario	Read Replies (1) of 2444

Xray - Thoughts on meeting demand, capacity and a fair price for NIR (1) If orders start to rapidly accelerate then Napier is able to handle them. I referred to this in one of my posts just over two weeks ago now. Message 4929462 Refer to point #3. (2) I've been saying that NIR has found a solid level of support between $2-3. I spoke to a trader over the weekend - and in the absence of News and if NIR is still over $2 by the end of July - then yes 'NIR has found a solid level of support above $2'. Right now it is - technically - 'holding' above $2 (Still learning here!). (3) My investemnt model for NIR to to invest in the potential the company offers investors. I don't see how you can project - with know levels of confidence - earning six months going forward - and then working out a fair value for NIR. The trader that I spoke with yesterday said that given the published numbers, adding a bit to ICI's published miniumum purchase from Aquasol over the next year - accepting a P/E of 20 (average for this market segment), assuming a 25% profit margin - that $14 was a fair price for NIR. Furthermore - for every $7 million increase in sales (assuming the above) that this represented an increase in stock price of $1 per share. If he wants to go through the math and post himself - then great - I'll just leave these numbers without a name here (hoping that I took down the figures correctly). However - what will the earnings growth be? If we just go with the $100 million aircraft refurbishment industry - then how do you factor this into the equation. What takes 5 barrels of methyl chloride (or equivalent) only takes 2 of SV-35. I was told by the company (not Jason or Sergio) that if volume sales start to decline - because SV-35 is just so much more efficient - that they (Napier) will consider increasing the price. So how reliable is the $100 million airline market number for NIR's earning's projections and how big a chunk will Napier now grab? Furthermore, Ron Graham told me a good while ago now that the $1.5 million deal that ICI Devoe Coatings had with Aquasol to purchase 'Hydrosol 700' (Aaquasol solution) was the minumum number - and 'We like to be conservative'. If you know anything at all about the British (Ron's Canadian - but it's a Britsih company) and what they mean by saying 'We like to be conservative' - that could mean anything. I know it's not going to be $1.5 million. So how do you factor this number into earnings growth going forward over the next 6-12 months? We also know that K-G Packaging is also in play here (referred to by Sergio in an earlier SI post) and referred to by Jason loosely when he told me (and others) that Napier is involved in talks with the world's largest contract chemical packager. Furthermore - Napier anticipate that the airlines won't be the money maker - it will be retail! K-G's parent in CCL Industries (CCQ.TSE) - and yes - they are a big time contract chemical packager. I've provide URL's to them in an earlier post. So gain - how to you factor K-G packaging and the retail side into NIR's earnings going forward over the next 6-12 months? I'm not even going to try to work out numbers for Ford, Amoco, Cessna, US Navy, marine market... At this stage I'm just going with Napier's potential. A year or two down the road may be a better time to gauge Napier's numbers- with more accuracy - and then estimate what the fair price for Napier should be. Right now I suspect that folks are doing as I am - investing in potential - which is enormous - and going long. (4) Thanks to those who PM'd me about my 'risky' investment strategy - 'putting all my eggs in one basket - and leveraging as much as I can'. I've mentioned a few times now - that this may be the first and last time that I do this (I am still holding onto a 'closed' mutual fund - AIC Advantage) - or until someone else - like Napier comes along - then I may just go with 50% of my holdings. I've made reference to Cramer's May GQ on traders/brokers who also invested very havily in 'killer stocks' and made a killing. Other's do it as well. For example - Warren Buffett held just 3 stocks in Berkshire Hathaway in 1987: Capital Cities/ABC Inc, GEICO Corportion and The Washington Post Company. Of those three - Capital Cities/ABC represented 48.9% of the portfolio! In 1994 he was still holding all three - plus others by then (Ref: p.281, "The Warren Buffett Way - Investment Strategies of the World's Greatest Investor" by Robert Hagstrom, John Wiley & Sons, 1997, 313 pp. $CAN8.99 in paperback). Everyone has their own investment strategy. My first purchase of NIR was way back on 16 April - picked up 1,300 @1.45 - after first being alerted a week before by an 'increaing volume' e-mail message from Canada Stockwatch (following the April 15 patent News). The more research I did over the following weeks - the more confident I became with Napier's potential and the more I purchased. I'm very happy to be where I am today - and have absolutely no concerns about NIR's future. I'm sleeping like a baby here :-) Following the next News there will be a big run up in price - followed by the inevitable profit taking - then a steady upward trend. Napier may well follow Dell's model - long term upward growth interrupted by the occasional downturn due to profit taking. At what level will the post-News profit taking hit for Napier? Well whatever level it happens at - I'll then let go of some of my 'little sweetheart' - retire ALL my debt - buy some toys - start to rediversify my portfolio again - go with about 20% in more conservative investments that'll I use to buy other stock in market downturns - but the majority of my holding will remian with NIR. I'm going to give it at least a full year to develop and realize its potential - or at least head a long way down that road. That's the Buffett model - invest in great stocks and HOLD. If it's good enough for him - then it's good enough for me! David in Ontario :-)

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