Replies to post #25500 on ProGreen US Inc. (fka PGUS)

[mag12]

Insta...This IS Stickie Material.....!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[gedi8]

Awesome info. Thanks INSTA!!

[HaasCat]

Yup....sticky status for sure.

I like how you undershot expectations in a lot of ways.

I agree with your sentiments on holding vs flipping and more specifically I agree with what you're alluding to in regards to how these courses of action can affect one's account.

I know I rarely if ever encourage holding securities in the event that someone asks my advice, BUT I can also confidently state that my favorite thing to due in penny land is hold. The key is being very very very selective.....I don't expect less savvy people to put as much thought into taking a position as I do (not you just thinking aloud) which makes it simpler to just tell people to flip and trade green.

But I don't say it lightly....holding the right ones can do far more for a person's account than flipping imo.

And me talking about "holding" on the PGUS board isn't a coincidence.....this has all the ingredients in place to make a long term sustainable run and while I do think .10-12+ cents is a real possibility; Id like to see us regain QB status first and foremost.....lastly though Id be very surprised if we aren't testing 03 by October

$PGUS

[bhonda]

Well written assessment, definitely deserves to be stickied, Go PGUS !!!!!

[Catpole]

Insta, many thanks for your DD and estimate of evaluation. Very complete and somewhat conservative in my mind but certainly one that should be strongly considered. Again, thank you for your detailed work.

[osbuser]

Great post Insta. Lot of nice catalysts in the pipe line and looking forward to the filings. Definitely looking to add more.

[6pack2go]

Isn't #1, #2, #4, #5, #8 all essentially the same?

Transparency.......

[MoneyForNuthin]

Very good post, INSTA, thank you! But why so conservative?

As indicated in your source for P/E ratio...

http://www.investopedia.com/ask/answers/052815/what-pricetoearnings-ratio-average-real-estate-sector.asp

...

P/E levels vary due to several factors including growth rate...

...

NYU's Stern School publishes P/E data for different industries and breaks real estate into four categories. As of May 2015, the data combines all REITs under one umbrella, with average trailing P/E of 43.45 and forward P/E of 59.97. Real estate developers trade at an average of 36.62x forecast earnings. Firms engaged in real estate services and operations exhibit trailing P/E of 48.96 and forward P/E of 23.45. General and diversified real estate companies trade at 61.96x forward earnings.

The stock screener tool on Finviz.com divides real estate companies into somewhat different industry categories. Median forward P/E among real estate developers is 26.27 as of May 2015. Forward P/E for property managers is 26.02.

...the numbers given are average and median statistics, and growth rate is a significant factor.

If ever there was a business in growth mode with very high growth potential - for years to come - it's ProGreen! ProGreen is only just starting, has been able to establish a solid starting position in the region with a very strategic business arrangment in the ProCon Baja JV and, with yesterday's update, Jan is already talking about opportunities for 'much more land' and additional/new opportunities in the Ensenada area!

You could easily make a valid argument to the upside here - that the PE ratio should be 50 to 100% higher than the average or median, simply due to the growth potential.

So is this a low-ball valuation you're giving us here? Trying to keep a lid on this until you get fully loaded, lol?

But seriously, I agree with HaasCat: "I like how you undershot expectations in a lot of ways." - 1) I think you are starting with a low PE for the reasons stated above; 2) you cut that low number in half, and 3) you did not include: Michigan properties (sales/lease) or further projects in Michigan, projects for commercial/residential development on the land not used for agriculture, anything that could develop with solar/SolTech.

I do like to look at these things more conservatively, though, as you did (at least in early stages). I think this shows that your valuation is not a stretch, by any means.

You also stated an excellent checklist for investing in and holding a stock in the OTC market. Some of those checklist items also belong on what could be labeled a 'Checklist for Shareholder Confidence in the CEO, Insiders and Control Shareholders', which might include some of the following:

1) Skin in the game: significant holdings by insiders; heavier on paid investments, lighter on 'awarded' shares, warrants and options. [CEO and control shareholders are holding a significant stake in the business, common and preferred shares, and nearly 100% of shares as a result of direct investments and open market purchases.]

2) Financial backing, ability to raise capital, ability to execute. [Check, Check, Check]

3) No steep income, bonuses and awards for officers, directors or other insiders/affiliates. [Check all]

4) No outrageous claims for what may come to pass (if you'll only bear with us while we dilute the heck out of your ownership, for example). [Jan said we're starting with these 300 acres, and we're looking at a deal for more land possibly in the range of 5,000 acres; then he said we're looking at maybe upward of 10,000 acres... and we ended up with control of ~14,000 acres in all. We had no way to truly control the assets so that we could actually include them on our balance sheet... ProGreen was a minority in the JV, due to restrictions by Mexican law. He said we're going to make business arrangements that allow us to control and claim our portion of the assets - we are now the 51% majority of the new ProCon JV and will have those assets on our balance sheet going forward. Jan said we're getting rid of this debt and not doing toxic debt again; we got rid of the debt; Jan and control shareholders bought the debt - not at a discount either, it was effectively converted to preferred shares at the closing price of the stock on that day. Jan said we're going to develop the 300 acres to get things going here and then sell it; to get the cash to do it, Jan and control shareholders injected $300K cash for preferred shares tied to the closing price on that day... didn't take on toxic debt to do it; the land was cleared, wells drilled, now up for sale as Jan said it would be.]

-- as you stated, the following --

1) One must see an IR department or UPPER MGMT that COMMUNICATES with its shareholders. [Check]

4) The management team must explain to its shareholders - their goals and a plan to execute. [Check]

This is only a checklist of more tangible and visible reasons to have confidence in our CEO. Most who've done a little bit of DD work - checked into the 'updates to the public', PR's, filings, made phone calls to the CEO and/or looked into his experience, expertise and connections... are very much aware of many more intangible reasons to have high confidence in our CEO, Jan Telander.

[allenc]

Excellent post.

[Davis_Elite]

Boooommm and there it is 19 days to go to QB up-listing!!

Another Nice churn day here with another close above a penny!! CEO working hard for us and still buying shares in the open market!!Longs holding tight for the journey, and accumulating more on the way up!!!

[INSTATRADER]

PGUS + ORGANIC FARMING IN MEXICO

Not all that many companies in the OTC have the RECIPE for success quite like PGUS...

1. ACCESSIBLE CEO
2. INDEPENDENTLY WEALTHY CEO
3. CEO WITH 40+ SUCCESSFUL YEARS EXPERIENCE
4. SOLID - PILLAR OF WEALTH INDUSTRY (REAL ESTATE IN GENERAL)
5. MULTIPLE STREAMS OF LONG TERM - DIVERSIFIED REVENUE

6. LASTLY - A GROUND FLOOR OPPORTUNITY IN A FAIRLY NEW REAL ESTATE SEGMENT. THIS RELATIVELY NEW SEGMENT IS FOREIGN ORGANIC FARMING NNN INCOME-

This opportunity is ground floor, not because the organic farming industry is just now beginning - its been around commercially for decades. It is ground floor because of the cost basis and terms.

PGUS is NOT technically the owner of these thousands of acres. If you could think of the best scenario to invest in real estate it would be what we have here with PGUS.

PGUS is the BANK and PARTNER without the entire responsibility, and will receive NNN income on top of it all. MEXICO does not allow foreign ownership of its land, but JV's are no problem. In the case of PGUS, the upfront $$ for the land goes toward IMPROVEMENT - NOT THE LANDOWNERS POCKET! Imagine buying 50% of a business from ANYONE and the ENTIRE proceeds go toward IMPROVING the business - NOT THE SELLERS POCKET! You now own 50% of that business AND the first $$ REVS that come out go into YOUR POCKET until you have had your investment returned AND STILL split the remainder 50/50 with that SAME SELLER! This reduces the amount of RISK in ANY similar such deal to negligible.

Moving on to reduce that RISK even more is the NATURE of this particular revenue stream... Their is no STRUCTURE to maintain (land is the asset)... Their is no payroll to meet...(again its land and nothing more)...Their is no BUSINESS to operate...(the corp NNN leasing the land will have the business) Depositing their check is the EXTENT of effort in this particular revenue stream after initially IMPROVING the land.

Lastly reducing risk to NILL - is just WHO or WHAT will be leasing this land... This land will not be leased by Joe Shmo Mexican farmer guy... It will be leased by a company like this: http://www.delcabo.com/

In the real estate industry - the POTENTIAL profitability of your holdings are HEAVILY tied to the TENANT(s) within the holding....
The larger the acreage - the larger the tenant - the larger the tenant the less the RISK..........

In Mexico, the ORGANIC farming industry is GROWING. The potential is GROWING. And PGUS is on the ground floor...

http://projourno.org/2014/06/with-new-regulation-mexico-emerges-as-a-leader-in-organic-agriculture-production/

Now that PGUS has been accepted to QB, and the S1 can access the $5M credit line, my valuation has risen..

Before I used 1/2 of a 26 PE because there were still some obstacles to overcome (certainly there still are) but a couple of the important ones I just mentioned are done. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=124517977

Using the same method I am upping the math to 2/3 of 26. STILL NOT INCLUDING the REST of the assets (14 MICHIGAN properties..7000 remaining acres...$2.5M remaining credit line buying power..etc)

That gets me to a 17.42 PE. STILL I will use the NON ORGANIC $4M low level NNN estimate and get...

MULTIPLY 17.42 * .012 (NET INCOME/SHARE) = .209/share up from .156/share 1 month ago.

IN THE OTC there can be NO SAFER INDUSTRY TO INVEST IN...NO SAFER REVENUE STREAM... NO BETTER BET ON CEO KNOWLEDGE AND EXPERIENCE...NO SAFER BET ON POTENTIAL FOR GROWTH...

INVEST WISELY