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Microcap & Penny Stocks : MTEI - Mountain Energy - No BASHING Allowed -- Ignore unavailable to you. Want to Upgrade?

To: eric deaver who wrote (1887)	6/17/1998 11:17:00 PM
From: Moonglow	Respond to of 11684

Eric, Thank you for that very well thought out post. I didn't know you were a geologist. How neat! You know what I've noticed. The people who are in this business, such as you and Robert Ulrich are the ones who know about this business, and those who are in this business seem to be some of the most bullish among us! Now that tells me something. I prepare taxes....and every year people come to me and say, "But so and so said this and this. And I look them in the eye, and I say, "Now who are you going to listen to....the baker down the street, or me who has been doing this for many years." I'm going to apply my own advice in this case. Who am I going to listen to.....the guys in the industry....or the other opinion on this thread. I think I'll listen to the guys in the industry. Juanita P.S. Your description of West Virginia is very accurate. Especially when you spoke of the infrastructure already being there. I would ask these people once again.....HAVE YOU EVER BEEN TO WEST VIRGINIA?

To: eric deaver who wrote (1887)	6/18/1998 12:07:00 AM
From: wonk	Respond to of 11684

Eric: I fully intended to go to bed, but I read your post and thought it reasonable and well-thought out. However, I disagree with your numbers. Let me explain why. The contribution to the stock price by these assets can be estimated based on the $250,000,000 sales w/ a 14% margin (seems pretty conservative based on what I read here tonight) that converts to $0.58 EPS at a pe of 5 that's an easy $2.90 stock JUST based on contributions from the 10,000,000 tons of coal. The 14% margin for The Ashland Coal Company was offered here by Lee Walsh: exchange2000.com However that was only a single quarter. If you look at the 1997 year end performance, ACI's net margin was approximately 3%. See wsrn.com Enter ACI then Select Fundamental Data and Ratios The prior two years net margin was 2.8 and 2.9 percent respectively. ZEI's figures were in the 8% range. In the calculations I did here, exchange2000.com I used a ten percent net margin for simplicity sake, which is favorable to a projection of MTEI's prospects. The second point is that you cannot take all the net income from the minerals and on top of that apply a PE because the asset has been expended. You are making the (not uncommon) mistake of double counting. One can either look at the total potential earnings derived from the resource or apply a PE to a yearly income stream derived from that resource, but not both. I took all the coal companies listed in this post: Message 4904297 and averaged the price/sales ratios at 0.89. Let's be even more conservative and use .75 that means the contribution to stock value represented by the 10,000,000 tons of coal alone would be $2.67... You are applying the price to sales ratio against the total revenue potential of the mineral rights as if the were sold in one fell swoop. Unless the sales can be replicated year after year, using a price sales ratio, in the jargon of finance, is not meaningful. I accept your professional opinion as a geologist that there is a lot of gas in this area of WV and therefore potential for quick exploitation. Thanks for your reasonable tone. ww