The stock in my opinion is worth more than 15.5 cents.Take a...

The stock in my opinion is worth more than 15.5 cents.

Take a look at the financials. There is around $500m of value including intangibles, attributable to ordinary shareholders (excl pref step up).

This equates to 75 cents per share per ordinary share. Given the company are required to constantly revalue the business, this is a realistic figure as at 31 Dec 10.

Assuming we have more write downs of intangibles (as indicated in the latest director interview), lets assume $100m, the share price value is still north of $0.50 cents.

The down side of the business is that its not in a growing and expanding industry. Given that paper is so yesterday, the business needs to venture out into other areas such as packaging where the real money isand business is growing.

If Paperlinx can continue to expoloit its current market and make head room into other growth areas, the price should recover.

Clearly what we currently have is major shareholders offloading stock. This could be a mix of crystalising gains before 30 June (hence the XT transactions) and the fact that it is now out of the ASX 200 and they need to rebalance the books.

The stock will not be a 1 month turnaround. In fact it needs at least 12 months to find its feet. There is HUGE risk with this stock however if they can get their cr%p together there is MASSIVE potential for upside.

I hold long term (nervously) believe this will turn around from 15 cents. I just hope that when the company said it was solvent there was still plenty of room in the tank.