Newsgroup: it.economia.borsa
Titolo: Sarà vero..........uhmmm

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"Ignorante" <Igno...@ignorante.italia> ha scritto nel
New DROOY Institutional Holdings
Jason Hommel
    If you go to Nasdaq.com, and you enter in your favorite stock, like
DROOY, there are a number of things you can check about the stock. An
interesting link is the "Holders/Insiders" link. You can see that 4.2% of
DROOY is held by 32 Institutions. Even further, you can see the names of
these institutions. Even better, you can see the total holdings of these
institutions, and even what stocks they are invested in. For example,
Jennison Associates LLC has $7 million worth of DROOY, but the value of
their portfolio is $45 Billion. DROOY's next largest institutional holder is
FMR Corp, which recently purchased $4 million worth of DROOY, and the value
of their portfolio is a staggering $452 Billion. Here is a table of DROOY's
largest institutional investors, the value of their DROOY holdings, and the
values of their overall portfolios.
    The tiny portion these institutions have invested into DROOY when
considering the overall net worth these institutions is huge. The potential
buying power in these few institutions is mind boggling. DROOY's entire
market cap is less than half a Billion.
    That DROOY has attracted the attention of FMR Corp and other large
institutions is indeed welcomed news! FMR Corp has a potential buying power
of $452 Billion, yet DROOY, and their tiny stake in the company relative to
their entire holdings, seems somehow not beneath their interest! They hold
over $452 Billion, and have invested $4 million into DROOY. Why? Why would
anyone take the time to bother investing less than a thousandth of their
portfolio into something? Something to think about.
    The next significant thing I note is that there are 6 brand new
institutional holders of DROOY as of 12-31-2001. These 6 also have a MUCH
larger investment pool than the rest. Total investment size of old holders
vs. new: 89.4 Billion vs. 983 Billion! This is extremely bullish news. DROOY
is attracting the attention of BIG money investors; and several of them will
have to compete with each other for stock if they want to invest in any size
that would be significant relative to their overall portfolio!
    Another interesting thing is that the address and phone numbers of these
institutions are available at Nasdaq.com. To me, this means that I, or
anyone, could contact them and advise them about certain facts relative to
DROOY.
    I wonder if these large funds are aware that several market analysts
have recently determined that DROOY should be valued at anywhere from $5-$10
per share by the time the first quarter 2002 earnings report comes out? This
is assuming of course that the gold price and rand remain steady, and
DROOY's stock price moves to a relative P/E ratio of 10 or so.
    Here are my own calculations:
    Considering CURRENT rand devaluation AND dollar/gold price gains to
derive an estimated short-term price target for DROOY stock, assuming
current values of rand/dollar/gold stay the same.
    If we assume DROOY is a "break even" company at $280/oz gold & 9
rand/dollar, and if we assume DROOY's costs stay the same in rand, and IF
those assumptions are ACCURATE, then we can conclude that the difference
between the "break even" prices and current prices will accrue straight to
the bottom line as earnings, and those are numbers we can calculate as
follows.
    DROOY mines 1.1 million ounces of gold per year.
    At average prices of $300/oz. of gold, and at 11.49 rand/dollar
    Fixed costs = 1.1 million oz x $280 dollar/oz x 9 rand/dollar = 2772 mil
rand.
    Likely profit = 1.1 x 300 x 11.49 - fixed costs = 3791 rand - 2772 rand
= 1019 rand x 1 dollar/11.46 rand = 88 million dollars - 30% for taxes = 62
million.
    If we then assume DROOY's stock price will move so that the P/E will go
to 10:1 ratio, then DROOY's market cap should be 880 million.
    With 157.3 million shares outstanding, simply divide 880 mil by 157.3
mil = $5.59/share for DROOY, or perhaps $3.94/share after taxes.
    Of course, I have read from other analysts that DROOY is expecting to
mine 20% more gold, but I don't know if that number is accurate, so I have
not included it in my estimates. But, of course, that would significantly
improve the bottom line.
    I wonder how much DROOY stock a fund like FMR could buy before their
purchase decision alone caused the price for DROOY to rise to $10 per share?
The huge problem that large institutions face when buying into a small cap
stock like DROOY is that they cannot buy in any size without significantly
affecting the share price. Small investors may complain about 2-3%
commissions, but the large institutions end up paying much higher
commissions to get into a small cap company simply because their buying
power can drive the stock price up 20% or more. Fortunately for our big
friends, they can still buy DROOY cheap, and also benefit significantly if
the gold price continues to rise.
    Jason Hommel
    February 21, 2005