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Microcap & Penny Stocks : Rentech(RTK) - gas-to-liquids and cleaner fuel -- Ignore unavailable to you. Want to Upgrade?

To: Rock who wrote (13669)	3/27/2000 8:51:00 AM
From: Howard Williams	Read Replies (2) \| Respond to of 14347

Projected RNTK share price valuation(s) (I hope this doesn't come out looking like the preview.....a mile wide) Having skipped the "Paul Harvey" aspects of the Tower/Weil analyses yesterday on Raging Bull (see below), here's some Monday morning comments, many of which include info and opinions already expressed by others. We seem to have three "camps" and I can't find fault with any of them. They're just three ways to look at the issue. Camp #1 --- "By the Numbers" ala Arthur Tower at Howard Weil over a year ago. I really did Tower a disservice yesterday with my $0.59-$36.04 price range post since I neglected to post the Paul Harvey aspects, aka "the rest of the story". That 61:1 price range reported in January 1999 represented the outer bounds considering the variables Tower analyzed. When reasonable assumptions were applied, the range narrowed dramatically, giving Tower/Weil a $5/share target in 1-3 years and $12/share in 3-7 years. Tower used a 12% discount rate and a 20:1 P/E ratio in his "most probable" calculations. Between 12/31/98 and 12/31/99, issued shares rose a little over 20% (52.6M vs 43.3M) and that would tend to drop Tower's estimates. However, IMHO the business relationships added over the last year, the broadened set of target niches (e.g., methanol plant conversions, industrial off gases) and the potential for equity ownership in Sand Creek (Tower only considered licensing revenues) more than make up for the increased common outstanding. Tower also said that RNTK's effectiveness in getting their technology licensed and into use is more important than any of his evaluation factors. RNTK seems to be doing quite nicely there. Add the $12 poison pill price to this "by the numbers" category and one gets a reasonable share price expectation range based on the most thorough, quantitative analyses done to date. Camp #2 --- "Market cap comparison with SYNM" As of this morning, SYNM's market cap is $686M and they have about 27M shares outstanding. RNTK has about twice as many shares outstanding. Neither company has a commercial GTL plant under construction. RNTK has about 5 times as many commercial plant prospects in the offing as SYNM, but SYNM's one prospect, Sweetwater, is larger and with 50% ownership of the specialty chemicals plant, SYNM expects to do quite well financially. Both companies have mature technologies. RNTK's technology is applicable to all GTL feedstocks and, based on the best data I've been able to gather, RNTK's technology is more efficient than SYNM's. However, it's difficult to say that either company is worth more than the other today IMHO. The next two years should identify which one is better, based on actual plant start-ups and the parameters for those plants (license fees, revenues, etc.). All that said, there's reason to believe RNTK and SYNM market caps should be close to equal today. That would put RNTK, with twice the shares outstanding, at about $12-13/share. Camp #3 --- "Speculative-Fervor Driven" (Do I hear $62-63 e.g.?) (numbers bandied about on RB) There's no question clean energy forces can dramatically affect RNTK's share price. They'll almost certainly have the first new commercial GTL plant of the 21st Century running at Sand Creek, probably by the end of next year, and it'll be right here in the USA. Their GTL diesel, simply for diesel engines, will be a big hit ........ with or without alternative fuel designation. Add emerging appreciation of GTL diesel's purity and high hydrogen content and its role in the fuel cell arena. Add to this the fact that RNTK F-T is probably headed for more GTL installations than anybody else's and the sizzle can get really significant. There is just one impediment standing in the way of RNTK being able to take advantage of these speculative market forces. First and foremost, they need to get listed again. There are three places that can happen and each has its terms and conditions. With RNTK's market cap, shareholder base and assets, they qualify for listing on the AMEX, the NASDAQ Small Cap market where they were, and the NASDAQ national market. The only thing standing in their way to being listed is their share price. I believe they need $3 per share to get on the Amex and $4 per share to get back on NASDAQ SC. And in each place, some period of time is required to get listed. Listing is important because many institutional buyers are prohibited from buying OTC.BB stocks, listing adds liquidity and listing makes the trading more orderly (IMHO) by taking it out of the hands of the MMs. Once they get listed, the next big step IMHO will be to get above $5 so they're marginable. Once they get listed and get above $5, then they'll be playing in the same investment ballpark as virtually all the other companies that are benefiting from today's love affair with high tech companies that will be playing central roles in tomorrow's economy. Pick a camp ..... or define another. All of the above is just MHO, FWIW. Best wishes to all.