Wednesday, August 1, 2007

Pink Sheets - Part III

Keweenaw Land Association Ltd. (KEWL.PK) is a timberland company in Michigan that owns 158,000 acres of land in the Midwest. It is another very open and transparent Pink Sheet stock with published financials and a web site. It has a very detailed and lengthy report on the value of its timberland assets as of 12/31/06.

I would urge people to read this if only so they can understand better the components of the value of timberland at other more mainstream publicly traded companies. This stock trades at $215 per share and has also been on a tear the last five years as seen below.



It's astounding to me how many quality companies there are that trade in the Pink sheet or bulletin board market. The web site is here:

Keweenaw Land Association

If you use the mid point of the asset value of its timberland, then KEWL is trading at 93% of its NAV. This analysis does not include any value for sub surface or mineral rights.

5 comments:

Adventures In Money Making said...

wow, thats pretty pricely for pink sheet stock!

I've been looking at PCL, TWF.UN and POPEZ too.

Eric J. Fox said...

I only know Plum Creek, not the other two, bu it look slike they have all sold off a bit. Time to buy?

daniel said...

We all know that high risk is correlated to high rewards in the stock market...So, these extremely risky stocks, could be the big payday. But first, you must study the market ins and outs as well as doing research on all possible investments. I would recommend starting by taking a look at this report i found on here that helped me a few weeks ago...

Penny Stocks with Pink Sheets

-cheers

Tim Eriksen said...

Here are a few problems I have with Keweenaw.
1. Historically, Keweenaw has excluded taxes in its valuations, and that appears to be the case again.
2. It trades near 100 times earnings. Realistically you can't cut all the trees down in a short period of time.
If Pardee Resources (PDER) did a similar calculation, I'd bet it would come up as a much better value than KEWL.

Tim

Eric J. Fox said...

I don't know Pardee Resources at all, but I will look at it today. I would think that price to book would be a better metric for a land company than price to earnings, but a 100 multiple is high. I agree with you on the tax issue also.