Please read first the post below to understand how the below derived thoughts are very conceivable for the following BLDV Biodiesel Operations Valuation:
From the due diligence revealed thus far, I am going to go out on a limb and believe that BLDV has purchased at least one biodiesel company in the US from which it recently PR-ed having three that they have already made offers to as indicated in the PR below: http://biz.yahoo.com/iw/080326/0379670.html
Technically speaking, there is a chance that since they made offers to three biodiesel companies in the US that we could be talking about BLDV having purchased three biodiesel companies for a total goal of having four to include their plans for the construction of their facility in Belize. For the purposes of this post, we will remain conservative and only consider that their intentions are to purchase one of the three US biodiesel facilities.
Since the production capacity of the US facility acquired is unknown and the facility in Belize is expected to produce 100 million gallons per year, I personally think it is safe to use a conservative amount for believing that the US facility will produce a minimum of 50 million gallons per year. From this, we can derive a "potential current valuation" and a "potential future valuation" for BLDV.
Potential Current Valuation for BLDV The current valuation will be primarily derived from the “what I believe to have already been acquired” US biodiesel facility which I believed to have the production facilities for at least 50 million gallons per year (gpy) of biodiesel fuel. The current price of biodiesel fuel is about $3.00 per gallon. So now, consider below:
50,000,000 gpy x $3.00 = $150,000,000 in Revenues
Net Income = Revenues – Expenses (Net)
I will use a basic and conservative 25% profit margin to consider for Net Income to include "all" Expenses for keeping this valuation simple to reflect Net Income as:
$150,000,000 x .25 = $37,500,000 in Net Income
This means that BLDV will earn as Net Income the amount of $37,500,000 and the remaining 75% (or $112,500,000) will be considered as Expenses.
Here’s the beauty of this US biodiesel facility recently purchased; it is ready to begin producing/generating fuel immediately. Because the facilities are already operational as I believe, there will not be a huge magnitude of Expenses in my opinion. The facility has already been constructed as I believe it is operational. So please note that using a 25% profit margin for this current valuation used above is extremely conservative. I think it is clearly easy to see that BLDV will not be spending anywhere near the 75% (or $112,500,000) in Expenses especially since the facility is already constructed, but I’ll remain conservative for now.
These facilities were probably fully operational and were shut down for non-operational reasons such as regulatory reasons or lack of being able to meet demand due to the lack of supply for feedstock or from the lack of supply for water. BLDV already will have these Economic factors defeated as previously mentioned in the post below: http://investorshub.advfn.com/boards/read_msg.asp?message_id=28892483
Currently, the Outstanding Shares (OS) of BLDV is expected to be somewhere in the area of 205,000,000 shares for a worse case scenario. Reverse merger details could cause the share structure to be reduced, but reverse merged ”upwards” into the higher price of the higher trading entity reverse merged into which in turn causes our reverse merger situation here with BLDV to be very different for the better. BLDV will not reverse merge ”downwards” as in the case of your typical reverse merger scenario which typically delivers a basic reverse split affect to their shareholders. Not here with BLDV. For this, I will use the 205,000,000 shares as a worse case scenario OS for calculating an Earnings Per Share (EPS) amount to help us to derive the ”potential” price in which BLDV could justify trading at.
Net Income ÷ OS = EPS
$37,500,000 ÷ 205,000,000 shares = EPS
.183 = EPS
A vast majority of the biodiesel companies trade within the Basic Materials Sector under the Specialty Chemicals Industry. The stocks within the Specialty Chemical Industry trade at a P/E Ratio of 33.60 to reflect the growth rate of stocks within that Industry. To remain conservative, I will consider using a 15 P/E Ratio to suggest that BLDV would grow at half the expectancy of all the other stocks within its Industry to determine the ”potential” that BLDV should trade right now:
15 Conservative P/E Ratio x .183 = $2.74 per share
This potential BLDV price per share could easily be considered tripled the $2.74 amount equating to $8.22 per share for a potential current BLDV share price. I say this because we could have very easily justified using a 75% profit margin instead of the 25% profit margin I used to remain conservative.
Something else to consider, we could used the ”actual” 33.60 P/E Ratio for its Specialty Chemical Industry in which it would trade to use as the multiple with the .183 EPS giving BLDV a value of…
33.60 P/E Ratio x .183 EPS = $6.14 per share
Potential Future Valuation for BLDV For the future valuation, just double the above valuations and add to the "potential current valuation" above as such is what is expected to be generated from the BLDV operations over in Belize to include the US biodiesel operations. Consider the details below to further explain.
The future valuation will be primarily derived from the “what I believe to have already been acquired” US biodiesel facility which is believed to have the production facilities for at least 50 million gallons per year (gpy) of biodiesel fuel and the production facilities to be constructed in Belize with an operational capacity of 100 million gpy. That’s a total of 150 millions gpy. The current price of biodiesel fuel is about $3.00 per gallon. So now, consider below:
150,000,000 gpy x $3.00 = $450,000,000 in Revenues
Net Income = Revenues – Expenses (Net)
I will use a basic and conservative 25% profit margin to consider for Net Income to include "all" Expenses for keeping this valuation simple to reflect Net Income as:
$450,000,000 x .25 = $112,500,000 in Net Income
This means that BLDV will earn as Net Income the amount of $112,500,000 and the remaining 75% (or $337,500,000) will be considered as Expenses.
From looking at the current and future potential here with BLDV, one should very easily be able to see why BLDV had made the decision to not stop at the OTCBB for their goals, but instead to go to the NASDAQ.
Although I am using a 25% profit margin, I think it is clearly easy to see that BLDV will not be spending anywhere near the 75% (or $337,500,000) Expense ratio I used to conservatively cover all Expenses. So please note that using a 25% profit margin for this current valuation used above is extremely conservative. Still, let’s remain with such to further derive a "potential future valuation" for BLDV.
As I explained above, we will consider using 205,000,000 shares as the Outstanding Shares (OS) of BLDV for a worse case scenario. Also as I had explained above, reverse merger details could cause the share structure to be reduced, but reverse merged ”upwards” into the higher price of the higher trading entity reverse merged into which in turn causes our reverse merger situation here with BLDV to be very different for the better. BLDV will not reverse merge ”downwards” as in the case of your typical reverse merger scenario which typically delivers a basic reverse split affect to their shareholders. Not here with BLDV. For this, I will use the 205,000,000 shares as a worse case scenario OS for calculating an Earnings Per Share amount to help us to derive the ”potential” price in which BLDV could justify trading at.
Net Income ÷ OS = EPS
$112,500,000 ÷ 205,000,000 shares = EPS
.549 = EPS
Still, as mentioned from above, a vast majority of the biodiesel companies trade within the Basic Materials Sector under the Specialty Chemicals Industry. The stocks within the Specialty Chemical Industry trade at a P/E Ratio of 33.60 to reflect the growth rate of stocks within that Industry. To remain conservative, I will consider using a 15 P/E Ratio to suggest that BLDV would grow at half the expectancy of all the other stocks within its Industry to determine the ”potential” that BLDV should trade right now:
15 Conservative P/E Ratio x .549 = $8.23 per share
This potential BLDV price per share could easily be considered tripled the $8.23 amount equating to $24.69 per share for a potential future BLDV share price. I say this because we could have very easily justified using a 75% profit margin instead of the 25% profit margin I used to remain conservative.
Something else to consider, we could used the ”actual” 33.60 P/E Ratio for its Specialty Chemical Industry in which it would trade to use as the multiple with the .549 EPS giving BLDV a value of…
33.60 P/E Ratio x .549 EPS = $18.44 per share
In conclusion…
Bottom line, all BLDV has to do is to announce anything relating to the consummation of the merger or the acquisition of the US biodiesel facility and the market should greatly acknowledge the huge potential here with BLDV. If not either of those announcements, then anything that shows enough promise of the direction of either of those achievements.
Still, from reviewing the above thoughts and how I derived them, they could be argued to have been considered very conservative. Again, read the post below comparing BLDV to the many NYSE, NASDAQ, etc. companies to further understand how. Then imagine if you could have gotten in on them at the ground floor before they made their major impact moves into the major markets. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=29396220
Please note that the above thoughts are not the gospel. They are thoughts to consider giving you an idea of where BLDV should be trading if they execute their business objectives anywhere near the vicinity of the variables used to derive the valuations above. If any of the variables are later revealed to have been different from what was posted above, simply use this post as a gage and use the substitution property to simply insert the correct variables to determine the new valuation.
My valuation posts are simply based on the company doing what is expected for them to do from the DD that is already available to generate speculation. It’s up to the company to transform the ”potential valuation” into ”actual valuation” for a confirmed BLDV valuation of success.
Personally, from doing my due diligence (DD), I believe that something similar or equivalent to the thoughts above will be transpiring with BLDV for the better. I think this is only ”some” of the valuation that Quincey sees to further support why BLDV will pursue NASDAQ objectives. I think BLDV is in the right market and the right places at the right time. I think this Jun of 2008 will be our first month for huge success and the start of quite a few huge announcements for us BLDV shareholders. Let’s hope that I am right.
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