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$1.31 tfs corporation limited

Excellent summary Roy2U. I have been following TFC for a few...

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ASH81

662 Posts.

01/02/16

12:34

Post #: 16912987
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Originally posted by Roy2U ↑

Now that TFC has reconfirmed guidance and sees no reasons for the share price drop, I believe the only other explanation is a major institution is manipulating the stock price to profit from shorts or to buy more shares cheaply from scared small investors. Either way this can only be very short term before true value comes to the fore. I know of no other stock which has all of the following going for it:

1. Net tangible asset (FY15 net assets minus intangibles) value per share of $1.26, around the current share price. TFC's owned forest assets alone have a present liquidation value of $2.77 per share according to Cannacord.
2. Forest assets grow in volume and value each year courtesy of mother nature, even without any new plantings or price growth for timber/oil.
3. TFC has a monopoly market for sustainable natural sandalwood stitched up for at least the next 15 years.
4. TFC will be able to expand the market to match increased harvest quantities (10 times the amount of owned heartwood this winter), so that oil prices are not impacted.
5. TFC will rapidly evolve from a business model of establishing, on-selling and managing of forests, to one of owning, growing, harvesting and sales of timber, oil and products using these. By FY17, the largest revenue earner for TFC will be product sales.
6. TFC will increasingly add royalties to product sales for ever growing over-the-counter and approved pharma products. Two more OTC products are ready for partners when enough oil is available (July this year?). Several more are currently going through Stage 2 and Stage 3 approval processes. This is effectively a free option.
7. TFC will be increasingly diversified by FY17 in terms of revenue sources and product markets. They will still have growing businesses (but a smaller % of the total) in establishing and managing forests for themselves and other investors, who see the advantages monopoly supply entails.
8. Upside potential from early re-financing of existing $US bonds. TFC is increasingly seen as a safer company as its revenues grow and diversify, as proved by reducing interest rates for more recent bonds.
9. Proven management ability (>15 years of forest management with better outcomes, and ability to meet or exceed guidance).
10. A huge ramp up of earnings over the next five years as harvests grow and markets expand (hearwood harvest to grow another 9 times over the next 7 years from the already much higher FY16 harvest).

Please refer to my earlier posts for a more thorough analysis.

Short-term price fluctuations and performance issues can always occur with any stocks, but in this case the strong medium to long-term outlook far outweighs any possible short-term issues.

I for one am not worrying about the current price.

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Excellent summary Roy2U. I have been following TFC for a few years now and felt today was a great entry point after the recent decline in the SP most likely caused by a large fund shorting TFC and wanting to buy in at lower price by scaring mum & dad investors into selling.

TFC Price at posting: $1.32 Sentiment: None Disclosure: Held
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0 Great analysis

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