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Microcap & Penny Stocks : Madera Int. (WOOD) -- Ignore unavailable to you. Want to Upgrade?

To: TOPFUEL who wrote (3058)	1/6/1999 5:56:00 PM
From: Richard L. Williams	Read Replies (3) \| Respond to of 3693

TopFuel-- So if what I read between the lines of your post is true, you are saying that you think that WOOD is currently overvalued. Let's do an item-by-item analysis of this stock to see what it should REALLY be valued at, were the market efficient in any sense of the word: 1) The land. Lots of it, in Brasil and Peru. Not all of it is owned by the company, but the Peruvian interest is theirs to use for 20 years. 2) The sawmills...two of them, worth $2m+ a piece. Madera has more lumber than these two mills can process, so their value can little be disputed. Madera will need more sawmills constructed to expand the business...the "growing" you refer to? 3) The lumber on hand...it will take this months' 10QSB to determine what is left from 3/31/98 onward... Prolly still quite a bit, I imagine. The auditor in November said the above was worth 52¢ a share. If you want to quibble and say that land in Amazonia isn't worth the legal hassle it would require to wrest it from the company in a legal dispute in a foreign country, halve the book value to 26¢, and let's go from there. Now, Madera as a company is earning money. We have been told to expect increasing revs, but the lack of numbers since March gives us no clue as to whether it is happening. I believe it is, since money begets success in any business, and Madera was finally making money then. So the 1.3¢ earned in FY 97 is assigned a PE of 10, well below industry standard, but worth 13¢ to the share price in our example. There there is Madera Environmental...the 251,000 acres this outfit owns, if sold off for $3,000 a piece (not likely in a short amount of time, until saving the Amazon becomes a hotter issue), would bring the company $753,000,000. What is that potential worth? That is $10 per share in potential value, roughly...give the stock 10% of that, (my estimate for the land to be totally assigned is ten years) for $1. Wild card is the web site about to come online...herbs and goods from a remote and exotic area that Madera is intimately familiar with...I can't estimate earnings here, but the company sees great things here...be a grinch, and say it's worth 7¢ to the bottom line, which at a PE of 10 (low for E-Commerce), would add another 70¢ to the value of the stock. My addition thus tells me that WOOD as a stock is properly valued at $2.09 a share. That was by halving book value, and downplaying the website--a conservative estimate. You say you are here to save old ladies their sugar bowl money from a scam, well, I can't see where buying this stock at around 10% of what I see to be its fair value can be construed as a ripoff. Yes, we are seeing a lot of dumping right now, but eventually people will gather enough confidence in this stock to prevent the drops to 1/8 we saw the past two days (but not today, thankfully), and it will move forward in a more orderly fashion. Please feel free to poke holes in my analysis...I can take it. Rick