is... a buy and hold investor of dividend US and Canadian stocks
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Well I can't really provide it, because this is a real project that I worked on, and I wold be divulging confidential information if I did so, wouldn't I? All I can tell you is that this is just one of many projects I have worked on, and it had that unique quality.
Tearing down equipment is not an easy thing. I worked in a nuclear environment once, and deconstruction is probably more expensive than construction. Every NATO country had places in the '50's where they experimented with nuclear energy. It is the basis of the nuclear industry today.
Well, they must be cleaned up now. Not only do you have to deal with radioactivity, you have to deal with asbestos and other contaminants. All fluids have to be removed. Fire safety has to be maintained literally until the crane ball starts to move (these were wooden buildings). Disconnecting services has to be planned, and that can be more work than connecting them in the first place.
It is natural that engineering is going to be done for the Owner by a third party. I worked in an industrial gases project environment. We utilized out own engineers for all of the Electrical and Mechanical (piping) work for any installation. Civil was outsourced because we were not particularly god at it, and since out plant was on our customer's sites (much like JBI) we utilized a consulting firm that already had extensive knowledge and data on the geology.
If JBI sells a processor to a customer it is going to require extensive engineering work, which will most likely be done by a firm hired by the Owner. Since it will most likely be a Union Construction shop, it will require Union labor, will cost Union rates, and will require an extensive set of plans, which means lots of engineering work needs to be done.
The SAIC Summary details this quite well, and the numbers jive with my experience.
No I don't think I am. This particular job I describe had a capital value of just over $12 Million. That is a medium-sized project. Similar to a 3 processor installation as described in the SAIT Summary. Although I question it's authenticity, the number in it jive.
The description you provided (from where you got it I don't know) describes an Equipment Vendor perfectly. On a job like the one described in the Summary, with a Capital Value of $9 Million, that is exactly what a Vendor would do. Of the 9 Million, they would likely get 2-3 Million.
Hired contractors have nothing to do with whether or not it is outside or inside. JBI would deliver the processor as you describe, but there is a lot more to do than just what you are saying. Lots of piping, some steel work,, etc.
At the end of the day, I am using the SAIC numbers as a reference and they do jive with reality., What also is real is that there is going to be a certain proportion of that that is pure Construction cost. Given that this is being done on customer premises and assuming it is a Closed Union shop, that work must be done by Union personnel.
If you are going to tout the SAIC Summary as being accurate, you must accept the numbers inherent in it as well. They conform to normal benchmarks, and JBI's role as an Equipment Vendor implies that they would net between 2-3 Million out of the 9 Million total.
No, it was from Investopedia. You provided the link. Here is the whole paragraph.
"Although short selling is allowed on these securities, it is not without its problems. Short selling on OTC is extremely risky because these securities are often very thinly traded, which makes them very illiquid. This illiquidity can prove hazardous if an investor needs to cover an increasingly unprofitable short position. If the volume is very low, covering the position may become a very unlikely prospect. Another problem that has arisen with short selling in OTC securities is the use of pump and dump schemes. These schemes are done by con artists who use internet message boards and SPAM emails to heavily promote a thinly traded stock in which they have long positions. When this happens, the result is often a high spike in the price of the stock, followed by a fall. However, the initial spike will devastate any investor with a short position. These schemes often use OTC stocks because they are relatively unknown when compared to exchange traded stocks.
"
??
This statement should read:
"The teardown occurred, the used equipment was transported across the country, and the New Build occurred using the used equipment."
not
"The teardown occurred, the new equipemnt wa stransported across the country, and the New builkd occurred using the new equipment."
I need an nbeer.
The determining factor is going to be the timing wrt winter construction, which is more costly. I know what you are thinking... fuel costs in a cold winter. Maybe somewhat, it might make people think about it... but summer construction is much easier.
The notion that the existing processors in NF will be "sold" is laughable. I worked once on a job that involved moving several key pieces of equipment across the country. There were 2 Construction Contracts, not the usual one. One for the teardown and one for the New Build. The teardown occurred, the new equipemnt wa stransported across the country, and the New builkd occurred using the new equipment.
Guess what? The dollar value of the 2 Construction Contracts was about the same (3-4 Million each). This was all factored into the ROI analysis, where various alternatives (buy new, etc) were looked at.
To sell one of their existing processors effectively doubles the construction cost.
And how do we know that 2 processors are built? Even if they are built, same argument as above applies.
I think your numbers are a bit high, and the original question was how much of the total goes to JBI. This question is unanswered.
There would be several parties to come together to result in a facility. One would be the Owner, another a third-party engineeirng firm to do the engineering work and manage the construction, another would be a construction company, and I believe that JBI would be an equipment vendor. I don't think that JBI possess the skills to construct the processor, and I don't think that the processors are sufficiently documented in the form of construction drawings and specifications for it to be built on any customer site. Furthermore, engineering would be required to come up with a design adapted to a customer site.
In that respect, the figures given in the SAIC Summary are accurate. 9 Million for a 3-processor facility, of which .5 Million was already spent on an OOM estimate. 2 Million for further engineering (that is consistent with indusry benchmarks).
I don't see any reason why it needs to be housed in a building... not necessary, and this has been discussed before. Something enclosed might be necessary for the feeder... You still have the same Civil issues... concrete pads would be necessary to place the equipment, but a building is unnecessarily costly.
6.5 Million left. Probably 3 Million for construction that would be managed by the third-party engineering firm managing the job for the Owner. The rest would be paid to JBI for the equipment (the "processor"), and JBI would get some fees for Project Management and perhaps engineering.
What do you mean it is not retail??
" use of pump and dump schemes. These schemes are done by con artists who use internet message boards and SPAM emails to heavily promote a thinly traded stock"
that is pump and dump defined. and that is done by retail con artists.
Your reference is actually quite reasonable. The rest of it is pure fantasy.
Take a look at the Praxair MSDS for industrial pure oxygen (liquid and gas form). Here is an excerpt:
"Extremely cold, oxidizing liquid and gas under pressure. Vigorously accelerates combustion. Combustibles in contact with liquid may explode on ignition or impact. May cause dizziness or drowsiness,.... etc... "
http://www.praxair.ca/en/gases/buy-liquid-oxygen-or-compressed-oxygen-gas
What I said is true. I remember last time it took quite a while for me to find a good reference. I will again maybe.
Oxygen is treated with a lot of respect in process industries. I know that systems with Oxygen in them are carefully cleaned and purged prior to commissioning. All it takes is a speck of sand in a pipe to cause combustion, then it is an explosion. Piping can be checked for pipe thickness ongoing. Anything inside it, water or whatever, will thin the pipe over time.
And I remember watching the training video where the operator of the delivery vehicle demonstrated how his oxygen hose was carefully ran on a CONCRETE pathway, not asphalt. The customers have to ensure that a concrete pathway is present. And spillage of liquid oxygen, combined with smoking?? = hazard big-time..
I don't have time now to look it up.
No I am not. Do a Board search on this topic. Look maybe 1 year or more ago.
We have been through this Steady. Do a Board Search. This was discussed years ago.
Pure Oxygen is a very dangerous substance to have in a process system. It is explosive IN THE PRESENCE OF AN IGNITOR. Therefore great care is taken to ensure there is no oxygen in a system, and if there is, that it is safely handled. People delivering oxygen to customers must take special precautions, as an example they are not allowed to allow the hose to be on top of asphalt, which is deemed to be dangerous because it is flammable.
This was a year or 2 back. We went through all of this then.
Neither one of them will mix it up with Oxygen around. Oxygen is explosive!!
Methane (bullshit) was not one of the feedstock sources. Interesting enough... carbon was. Therefore, one of the worst greenhouse gases known could be eliminated by making it a feedstock to a hydrogen plant!!! If methane were required, I am sure that it could have been piped directly in from the Executive offices.
No. Nitrogen is an inert gas and generally does not fight or argue with anybody.
Usually a process machine like this would be designed for the customers specific feedstock and environment. Although yes, it could work the other way around as well. My opinion is that each sale would be somewhat custom, for specific feedstock, layout especially, ... etc.
Thanks. My point was that they have to make enough margin to cover all of the SG&A and other costs in order to just break even. 15k won`t cut it. So much for fuel sales. They made more from processing tapes... LOL
Now, from a potential P2O buyer`s perspective... what they make from P2O must give them a 20% ROI over 2 or 3 years. That is to say, repay the capital cost, plus 20%. I took the Gross Profit from P2O from last quarter`s financials. Reasonable. I am sure if you look in most references on ROI analysis, it is done over a 2 or 3 year time frame. Beyond that, the Present Value of cash flows is very little anyway. You can see it if you do a spreadsheet analysis.
But, some posters have brought up some interesting points, which I will try to incorporate into future versions of the spreadsheet.
Actually, that is a good point. I put in a line (currently empty) for the cash flow resulting from the elimination of waste disposal fees. There could be other lines for elimination of these 2 costs (pre-processing and feedstock procurement). I don't remember there being much explanation of the COGS in the last Financial Statements.
I will try to incorporate in v2. Any information that can be helpful would be appreciated.
OK. Well, I guess I stand corrected!!
Last quarter they made 15k on something like 500k in revenue, or less. I can't remember. That is not economic viability, as my spreadsheet clearly shows. I took one number from the last financial statements. Why don't you make an argument as to why my spreadsheet is not valid for a required 20% ROI over 2 or 3 years?
As if it was a priority in my life. I have since seen the responses and will get to the next version when I have time.
The reason why that spreadsheet can be relied upon is that I saw firsthand this methodology being applied in a company. The company was big enough to require it, very well run, but small enough that I could clearly involve myself in the whole process.
What is not so simple is coming up with the cash flows that go into the model. Mainly on cost, but on both Cost and Revenue. The Cost side involves years of experience, professional estimating designations, the works. Once you know the cash flows, yes the math is simple. But all of the detailed analysis and backup has to be there. I have seen it firsthand, and any Fortune 500 company will utilize the same process.
This is a whole lot different than building something from the bottom up. It is easy to make false assumptions that way. I am simply looking at what is required to qualify it as an economic investment compared to what else is out there vying for Corporate capital money. And I pulled one number from the last financial statements If you don't like the spreadsheet, why don't you make an intelligent argument as to why it is not valid?
I find it funny how every new strategy announced by management must be true because they simply can't possibly be that stupid or self-serving. It started with the actual building of the processors themselves. Why would they spend 60 Million unless they actually worked? That was when the game was selling fuel. Now it is how can they be so stupid as to try to sell processors that have been shown to be uneconomic?
Well, the answer is that they may be arrogant, stupid, and self-serving. Simple.
Maybe they pitch the jBI stock they received as compensation to foreign clients and get them to buy more? Like in this video...
The runup was at .20 from .06 when the financing closed. Therefore, the argument that the runup was to encourage participation in the financing is quite valid. There is a good correlation.
Could it be that there simply was not much interest in JBI shares? Hence the low financing. It is almost more damaging to proceed with it than it is to accept the money.
I believe that this financing could have been interpreted as a negative signal... hence the downward movement.
That could have been because whatever mechanism was used to raise the stock price was continued after it closed, so as to not appear too obvious... Today's fall was predictable for other reasons. The financing can be considered quite weak... it is a weak signal.
"I am looking to buy these shares back if it dips to .20 again"??
shouldn't you be looking to buy low? wait until it goes back down to .05. I am being serous here...
Hopefully you made money on the 8500 that you sold...
How you know JBII not bankrupt? Whether Short or Long, Bankrupt is Bankrupt!! They have no money!! 125k last 1 week only!!!
??????????????
My prediction turns out to be true!!! and no Lvl 2 or Lvl 3 analysis was necessary...
K, here is my take on this financing... my immediate reaction. I think the stock will crash tomorrow, since this runup was somehow orchestrated to support this financing. It did not work in terms of justifying a higher price. Financing is over, runup is over...
Since when has there been a Price/ Sales Ratio? Price\ Earnings yes, but not price to sales...
guessed wrong... LOL. Patience is a virtue, especially in the stock market... ROFL.
try this. Play away...:
https://www.dropbox.com/s/4rebhjtc4xr3jdl/ROI_calc_v1.xlsx
I am in!! I figure tha this stock reacts strongly to any news, so I have enough shares to attempt to swing trade it on news.
This news is strong though. I feel the Force with this one. So, I did not hesitate to buy some as soon as it fell.
Very little volume today, it may not fall much more...
To the moon!!!
Thanks for your input. The only reason why I did not make it a hosted spreadsheet was that I could not figure out how to do it.
Yes I assumed an average quarterly profit. The reason why I did that was to make the calculations easier. There could be different quarterly profits over time, but that would be hard to model. Frankly, I think that production would be fairly consistent anyway.
The spreadsheet does determine the quarterly profit required to make a certian ROI. What I did was to plug in different numbers and then populate the table. it was an iterative process to arrive at the Yellow area, which is where JBI needs to be.
I have worked in several companies that did this analysis and had this Capital Budgeting process. And yes, the one that was the most proficient at Cost Control (they ran a tight ship) did tend to want an ROI of over 20%. And yes, that did mean that the original investment was paid off in 3 years plus a return of 20%. This is a mature company. So, I am going to stick by that claim, although other companies may differ. I worked in Mining, for instance, and projects there are very far-reaching. Although I cannot remember, it would not surprise me if projects were capitalized over longer periods of time.
Tell you what, since my intent is to be helpful I will see if I can make it a variable. You will be able to choose the time frame for recouping original cost, to a max of 10 years.
According to the textbooks, if the ROI is greater than the Cost of Capital, you proceed with the project. Alternatively, an NPV greater than zero. I can say with certainty that this is "bollocks".
A short time frame makes sense... look at how the Present Value of a Future Cash Flow declines beyond 2 or 3 years.
Equipment is different btw... I would agree with you on that one.
JBI may not be a mature company, but we have got to think in terms of who is Buying the processor, not who is selling it. JBI is a vendor, nothing more.
Thanks for your input.
BIG: (Beer is Good)... LOL I finally have the spreadsheet you have been looking for. I could not figure out how to host it, so I took a screen shot of the results and it is below.
Assumptions:
- a capital cost of $2 Million as discussed
- an average quarterly gross profit, all discounted back to time 0, which is the completion of construction.
- a discount rate equivalent to the lending rate at the bank, or the return that JBI could get by investing the money elsewhere.
As you can see, the results are worse than expected. Looking a the values I have chosen, you can see that JBI would need a quarterly Gross Profit from P2O of $280k in order to justify a $2 Million dollar investment.
All dollar values are in thousands (k) in case you are wondering.
According to my real-life experience, in order for this project to be approved, it wold require an ROI over 3 years of over 20%. That would mean repaying all of the original investment, plus an extra 20%.
These are the conditions that another company would be under when looking at a JBI machine as an investment. The implication is, in order for JBI to be able to sell a machine, they would have to guarantee a return of at least 20%.
You don't want to know how it looks at the current Gross Margin of 15k.
You will notice that I left a line item in there for Reduced Tipping Fees or Disposal Costs. I have it at zero because I have no numbers to put in there. You can enlighten me if you can.
I calculate the Net Present Value (NPV) and ROI (Return on Investment) for various combinations of Rate of Return and quarterly GM in a table. I then highlighted in Yellow the sweet spot that JBI needs to be at. As you can see, they need to make a lot more money. I did not calculate all of the possibilities, just enough to provide a view of the reality.
This is exactly the kind of analysis (at a high level) that a company would do when looking at capital expenditure. I have been involved in this, so this is first-hand knowledge.
You can see that in the NPV Calculation, the value of a distant cash flow is much less than more imminent flows. That is why the time frame is never more than 3 years. It makes sense, given that JBI could invest the money elsewhere. And the Rate of Return is very important, as you can see.
Enjoy... or not.
Oh based on what I know of JBI I think that jB is probably a fairly bright guy, but one that keeps things to himself. Most IT people are like that. They just don't naturally share and collaborate well. Hence the need for him to be involved in the tape business for it to be successful... etc... and now the plastic sorting/ throughput.
Golden Rules of Investing. I was just doing some research on this topic, and I came across some gems applicable to JBI. I am just putting them out there, for a few laughs if nothing else, on this holiday Canadian weekend. I have no opinion. Enjoy!!
From (Peter) "Lynch’s “25 Golden Rules for Investing.” "
"Golden Rule No. 5: Often, there is no correlation between the success of a company’s operations and the success of its stock over a few months or even a few years. In the long term, there is a 100 percent correlation between the success of the company and the success of its stock. This disparity is key to making money; it pays to be patient, and to own successful companies."
- with respect to the thought of separating the company from the stock... LOL..
http://www.fool.sg/2013/11/28/three-golden-rules-in-investing/
and here is a gem (self-explanatory)
"
8. Buy shares in a business which can be run by an idiot
Never buy shares in companies which require a genius or charismatic chief executive to make them work. Sooner or later that individual will no longer be there, and what then
"
ROFL
http://www.ft.com/cms/s/0/a955c74a-76a3-11e2-8569-00144feabdc0.html#axzz2tZDWTvqL
afterthought, it appears as if these sites make you input your email addy or something.... unfortunately... to spam you... LOL.
I always use the Money FLow for any stock. I find it to be the most reliable indicator, although I never use it as the sole basis for a buying decision. Sometimes I notice that something is oversold Oversold when it should not be(the market is up), and I will buy. Usually I make enough to take someone to the footbaLl game, nbeer, hot dogs, and the bus to and from. It is fun.
Buy - Bullish Harami (American Bulls)
Note that in the text they say that their last recommendation was wrong... go figure...
Our system’s recommendation today is to BUY. The BULLISH HARAMI pattern finally received a confirmation because the prices crossed the confirmation level which was at 0.1815, and our valid average buying price stands now at 0.1820. The previous SELL recommendation was issued on 2/6/2014, 6 days ago, when the stock price was 0.1695. Since then JBII has risen by +7.37%.