Yes PPT are having to consult their demons/ past weakness in strategy. From what I have read PPT have been implementing strategic changes for some months now that better reflect the current and future market conditions. I know from recent commentary that although very late they consider the new direction very encouraging (just not in time to save the outgoing CEO) With that in mind PPT have secured NFK under this new strategy, which I find encouraging. Also as you say Legume if PPT are net sellers they must also see value in purchasing NFK at these levels. I also looked back on PPT's 1st 5% where they paid in the $ 1.20 - $1.30 region. Without trying to sound to fluffy, I see this as very strong and solid support for NFK in the right way. My own analysis of the numbers, comfortably put's a core value (not SP) north of $2.00 on the basis that NFK continue to deliver the same stable earnings that management have consistently delivered on. My view is this is a management team that is conservative and thorough and not given to over promise. I also have paid attention to managements focus on increasing recurring earnings, which they have delivered on each year, and at the same time they have slashed their Net Debt to Equity to now be net cash positive. As far as where I think the share price (SP) will go, then if I discount 20% off the $2.00 to give comfort within this market, then $1.60 is a very realistic conservative SP target which still allows a substantial discount to Intrinsic Value and this is what PPT would be looking at as well. My time frame for core value (intrinsic Value) is real time (not 1 year out) and this in theory apply's to where the SP should be now - NFK is just to cheap, I haven't been able to find many conservative well run company's that meet such a huge discount to their intrinsic value (disregarding single commodity/ exploration small cap stocks) Sorry for the long reply but I have spent a lot of time investigating this company over the past few months.
NFK Price at posting:
$1.12 Sentiment: Buy Disclosure: Held
