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Microcap & Penny Stocks : VLVT (was CSMA) -- Ignore unavailable to you. Want to Upgrade?

To: Just My Opinion who wrote (1982)	11/29/1997 8:27:00 AM
From: TraderGreg	Read Replies (3) \| Respond to of 11708

OK, let me pull up some numbers from my post 532 where I was looking FORWARD. MY ESTIMATES BACK THEN WERE: AdHatters --2 million sales(cost @$.50, sold to distributors@ $1.50) will yield 2.0MM earnings. Franco's hole--at just 1000 BBL/day for but SIX months with $16.00 per BBL earnings($20/BBL revenue) will yield 2.0 MM earnings Assume oil/gas and LPS (financial outfit) are merely covering G&A and Overhead; assume further that CSMA interest in ERHC is not accretive to earnings directly. OK, with MORE CURRENT INFORMATION and still looking FORWARD, MY REVISED ESTIMATES ARE: AdHatters should easily produce 2 + million units annually, with the 2.0MM earnings estimate still very reasonable. Franco's hole(EnviroTec)- still using but SIX months utilization looking FORWARD, but the demand estimate of 1000 BBLS per day is quite conservative looking. Keep in mind, EnviroTec will be the first Class V in the area AND current dumping is 50,000 Barrels/day AND the local and state governments will be among the first to utilize the facility, as a flag waver to encourage compliance. As such, IMHO, once the facility is operational, even minimal compliance by the Class V waste generators could substantially increase throughput well above 1000 BBL per day. So let's say we're at 2000 BBL per day or merely FOUR PERCENT OF THE MARKET. I'M ASSUMING 96 % NON-COMPLIANCE HERE, OK. In the material provided with the proxy it indicates that operating costs for EnviroTec are on the order of $120,000 per year (WHETHER IT'S HANDLING CLASS V OR CLASS II WASTE!!). I had used $20 per bbl with $4 per bbl cost. Since costs are relatively fixed, it would be better to estimate revenue and then subtract the fixed costs: 2000 BBL/Day X SIX MONTHS(125 days) X $20/BBL = $5MM REVENUE, with $120,000 costs!! Let's throw in another $380,000 for govt. retrofits/safety/etc. and I can now see $4.5MM earnings FORWARD Oil and gas, which was NOT INCLUDED in my previous estimates already has one producing well netting $60K per year, with candidate projects that will be larger producers. But since those new properties will probably require shares to be issued, let's ignore those new properties for now. LPS, also NOT INCLUDED in my previous estimates, has been estimated in the material I received at $1.4 MM in the first 12 months. No other growth will be assumed by me. Sale of Uinta for ~1.0MM still will not be considered accretive to earnings since it is in the form of restricted stock, but it can be used in the future for asset acquisition. Let's not consider that for now. OK, quick recap with MY ORIGINAL ESTIMATES and CURRENT ESTIMATES: Earnings Original Current AdHatters 2.0MM 2.0MM EnviroTec 2.0MM 4.5MM LPS ZERO 1.4MM Oil/Gas ZERO 0.1MM Total $4.00MM $8.00MM Shares 15.6MM 22.9MM(actual shares) EPS $.256/share $.349/share So, we got some BAD news and we got some GOOD news. Moreover, the 50 % growth rate I used in the previous posting may actually be on the low side, but let's keep it as 50 %. But since everyone thought my P/E estimates were too high (even in the early years), I'll leave it to you to assign your own P/E. I'll use a P/E of 25 for the initial growth period (even though we all know of companies that barely are making money and garner THREE DIGIT P/Es. see Netscape, AOL,Amazon Books). Nevertheless, I'll use a P/E of 25 which is a PEG of 0.500(p/E/growth rate) I get a stock price of $8.73, which is down by 32 % from 12.80 estimate, but primarily because I cut the P/E by 50 %. BTW, I still used 22.9 MM shares Al, because that's the number we now have. On balance, I see a NET POSITIVE. As always, I welcome your numbers. TraderGreg