Post deleted by Mat Sklansky

[jogger08152]

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Based on my back-of-the-envelope calculations, Bioteq should have a 2008 P/E of 25,

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They have no earnings.

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which is incredibly cheap considering their profits should grow 50% annually for the next 3 years.

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There are no profits. They lost less money in '06 than in '05, but more than in '04.

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They've been raising capital by issuing shares (being an environmental tech company probably doesn't hurt the cause), which is nice for their survival prospects (they can sustain their losses because of the capital influx) but not so nice, because of the earnings dilution factor, if you hope they will make a lot of money down the road.

I can see no reason to invest in this company ATM. If you're interested in it, throw it on a watch list and check next year's annual report for new developments.

[DcifrThs]

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Based on my back-of-the-envelope calculations, Bioteq should have a 2008 P/E of 25,

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They have no earnings.

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which is incredibly cheap considering their profits should grow 50% annually for the next 3 years.

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There are no profits. They lost less money in '06 than in '05, but more than in '04.

-----

They've been raising capital by issuing shares (being an environmental tech company probably doesn't hurt the cause), which is nice for their survival prospects (they can sustain their losses because of the capital influx) but not so nice, because of the earnings dilution factor, if you hope they will make a lot of money down the road.

I can see no reason to invest in this company ATM. If you're interested in it, throw it on a watch list and check next year's annual report for new developments.

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yes thats all well and good, but the future may be bright and the OP doesn't mind something that may have a large potential payoff and would be exciting to watch.

the OP is a mid limit poker pro (mid/high?) who has enough money where this 20k won't be a big loss if he loses it but wants to get some entertianment and possibly large gains in the future.

if this stock doesn't fit that criteria, i don't know what does.

Barron

[AvivaSimplex]

If anyone is interested in doing due diligence on this, there's a lot of information in Bioteq's Fact Sheet and Investor Presentation.

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Based on my back-of-the-envelope calculations, Bioteq should have a 2008 P/E of 25,

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They have no earnings.

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They have 4 smallish plants currently running, which pay for their own operating costs, plus the administrative costs. They should turn a slight profit this year. The key is, they'll open two giant plants at the end of 2007. You can see the projections for these on pages 14-15 of the investor presentation. Updating those projections to today's metal prices, those two plants alone will net $14 million Canadian. Administrative costs shouldn't go up much, so that should go straight to the bottom line.

Divide $14 million into their market cap (which has dropped since I last did this calculation), and you get a P/E of 19! That's not even considering the other two plants they have under construction, scheduled for '08 completion.

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which is incredibly cheap considering their profits should grow 50% annually for the next 3 years.

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There are no profits. They lost less money in '06 than in '05, but more than in '04.

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I'm assuming they'll continue to open 1-2 new plants per year, and expand operations somewhat at existing plants.


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They've been raising capital by issuing shares (being an environmental tech company probably doesn't hurt the cause), which is nice for their survival prospects (they can sustain their losses because of the capital influx) but not so nice, because of the earnings dilution factor, if you hope they will make a lot of money down the road.

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Ummm.... That's a strategy followed by nearly every startup company. Their balance sheet is in great shape, they have $28 million cash and $1 million in debt. 2007-2008 is the critical period where they expand their operations on a much larger scale and start making some serious cash.

Obviously there are risks. The biggest is that BQE doesn't execute properly, and there are a lot of delays and cost overruns in the building of the plants. It's worth noting that they've built 4 plants in the past, and are expanding their engineering capabilities. A second risk is that their profits are tightly geared to metal prices. Still, even if metal prices drop by 50%, they'd still make $3 million in 2008, which, as worst-case scenarios go, is not bad at all.

[Sdrive]

would opening an etrade or scotrade account allow me to trade canadian stock?

[ifckladyluck]

buy goldman puts.

[ifckladyluck]

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buy goldman puts.

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thats a sound argument

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actually, id rather sell goldman calls. The banking index has been doing fairly shtty, and should continue to do so. Furthermore, goldman was involved with bear sterns in taking large baskets of subprime loans off servicers hands. Those two bear sterns funds announced bankrupcy a cuople weeks ago. Sounds like a leading indicator to me.

[DcifrThs]

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SP500 down 5-6% in a week. Avg PE is at the lowest point in more than a decade. I think I might just buy index funds with it, whole market seems pretty cheap right now.

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just keep one thing in mind. Price looks at future earnings. Earnings (reported) are based on past Qs.

we are in a prolonged late cycle environment. the next phase of that cycle is higher global rates and lower growth. low growth is bad for equities as are higher rates. the low P/E may be accurately reflecting the coming environment. in fact, it may be underestimating the degree to which rates may rise if growth (reported) firms further and inflation (due to capacity constrainsts & commodity price flow throughs) pushes higher. consumption may also pare back further hampering growth without a rise in rates (deteriorating future earnings).

hope this helps your thought process.
Barron