We held TFC until the GFC when it had to be sold due to margin loan constraints. Fortunately we made good money at the time, and fortunately we have not had to experience the value trap that has occurred since then.
There may be a time in the future that we hold TFC again - when the chance for greater dividends and growth from profits are readily apparent. Which is not the case now, allowing the shorter's to have regular feeds in between the blarney that keeps some shareholders entranced.
The current thread/s are noting the potential poor performance expected for a few years because of low tonnage plantings, increase in debt, while the vertical integration is still absorbing funds and now management has re-stated the aim of increasing ownership of the lots, hence talk (rumors) of a potential take-over. Unless management lay out a plan in the near future of their expected revenues, dividends and expenditures through to 2006 when the big crop comes in, expect a wild ride including SPP's or options to dilute the share price with the only counter to the down side a potential takeover, that will only reward a few.
Unless management can convince me to the contrary, TFC is a value trap until the money is found to complete the dream. I also recollect a tangent dream (brain fart) that they wanted to diversify into other types of tropical forestry, before the current dream evolved/became possible.
I am particularly concerned that the main shareholder has stated in the past that he is bound to side with any reasonable takeover offer. Which leads me to consider the only chance of a reasonable growth surge between now and about 2006 will be if someone wants to buy the company/majority on the cheap sometime around 2020 when I expect the SP to be low and shareholders further disenchanted and ripe for a takeover. Leaving all the faithfull that have held shares from the beginning a puny reward compared to the potential in the future.
Unquestionably the company, its product's, the fundamentals and general direction is excellent. The potential to make shareholders a lot of money when all the lots are owned along with the water rights and run from seedling to value added sales, from say 2030 when there is low/no debt is unquestioned. Unfortunately to date, it is only the plantation holders/land owners have made the money.
TFC Price at posting:
$1.52 Sentiment: None Disclosure: Not Held
