There has been much talk lately about Coca-Cola and its potential as a value stock – as it now spots a dividend yield of 2.6% (which is the highest dividend yield since the late 1980s) and a P/E or less than 21 – right at the bottom of its five-year low. Moreover, the current price of approximately $43 a share is also near the bottom of its nine-year range – (nine years ago, the last former great CEO of Coke, Roberto Goizueta, was still at the helm of the company). Sure, Coke has had its own set of problems, but it is a great company, they would argue – and heck, Warren Buffett is also an owner of Coke shares.

Don’t get me wrong. I really like Coke as a company. Its brand is as American as can be, and yet over 70% of all its sales are derived from outside of North America. The country with the highest consumption per capita of Coca-Cola is Mexico. According to Interbrand.com, the brand name of Coca-Cola is worth approximately $67 billion and is the world’s number one brand name. Who could forget the famous declaration of Coke’s patriarch, Robert Woodruff? When the United States made the decision to enter World War II, he placed his hand on his heart and famously declared that he would “see that every man in uniform gets a bottle of Coca-Cola for five cents wherever he is and whatever it costs.” Of course, it didn’t hurt that Woodruff’s friend, General Dwight Eisenhower, was a great promoter of Coke as well. By the time the war ended, hundreds of thousands of fighting men and women became a fan of Coca-Cola for the rest of their lives.

Under the leadership of Goizueta, Don Keough, and Doug Ivester, Coca-Cola emerged as a growth and must-own stock during the late 1980s and up to the mid to late 1990s. Keough was the great motivational speaker, while Goizueta was unmatched in his ability to “manage” the stock price and the Wall Street analysts who covered the non-alcoholic beverage industry and Coca-Cola. Goizueta had a habit of watching the stock price of Coca-Cola on an intraday basis on a computer in Coke’s headquarters. When Warren Buffett was buying shares of Coca-Cola back in 1988, he and Keough figured it out by watching the action of the trading and tracing those purchases to a broker based in Omaha. Ivester, a former accountant, could have been regarded as a great financial alchemist. Under the financial leadership of Ivester, Coca-Cola bought out many of its bottlers and named the entity as Coca-Cola Enterprises. The bottler went public in November 1986.

When Coca-Cola Enterprises (CCE) went public, Coca-Cola (the company) owned 49% of its outstanding shares. Because of this, Coca-Cola had the ability to raise syrup prices at will (the former agreement mandated that Coca-Cola only adjusted its price to match inflation for its syrup in the North American market) – thus squeezing the profit margins of the bottler but increasing its own revenues and profits. The stroke of genius was this: Because of the fact that Coca-Cola only owned 49% of CCE, it did not have to consolidate any of its financial statements with CCE. At the time, not one single analyst totally understood this relationship. Year-after-year, the company delivered. Goizueta carefully (personally) managed all the information that came out of Coca-Cola. He would personally call Wall Street analysts. Any analyst that dared to question him openly or disagree with Coca-Cola’s earnings projections would be rebuffed. One such analyst was Allan Kaplan from Merrill Lynch, who at one point wrote a note to his clients observing that Coca-Cola may be depending on Japan for too much of its profits. When Goizueta found out about the note, he responded angrily with letters to both Kaplan and his bosses at Merrill Lynch. Kaplan was banned from attending analyst meetings at Coca-Cola for more than a year. From that point on, analysts knew not to mess with Goizueta and Coca-Cola.

Keough officially retired in 1993 while Goizueta passed away in October 1997 – succumbing to lung cancer. Ivester succeeded as CEO but behind the scenes, the company was in disarrays. People loyal to Keough and to Ivester clashed – with the former group bearing the brunt of the hardship. The current CEO, Neville Isdell (who was loyal to Keough and the only true competitor for the top job back then) was sent into “exile” to Great Britain to head up a bottler. According to a recent Fortune article, “The biggest problem [with Ivester], though, was his tin ear. Ivester was high in IQ but terribly short on EQ. A self-made, stubborn, very shy son of North Georgia millworkers, he had gotten where he was through brains and hard work. He resented Keough’s grandstanding, say people who knew him well, and never fully appreciated the importance of Goizueta’s almost daily chats with directors. (Ivester declined to comment.) Before long, head-down and full tilt in a turbulent market, Ivester had alienated European regulators, executives at big customers like Wal-Mart and Disney, and some big bottlers, including Coca-Cola Enterprises (on whose board sat Warren Buffett’s son Howard). As he raced to put out fires, he became increasingly isolated from his own board of directors. One person was keeping in touch with them, though, even in his retirement—Don Keough.”

By December 1999, Ivester was out as CEO, after board members Warren Buffett and Herbert Allen told him that they have lost confidence in his leadership. If anything, the next CEO Doug Daft fared even worse than Ivester. Daft, an Australian and who ran Coke’s Japanese operations, did not have a clue about the culture in Atlanta. In a sort of retaliation for Ivester’s handling of Keough’s loyalists, he also made many of Ivester’s favorite executives leave the company. He also looked for quick fixes – for example, by trying to boost Coca-Cola’s profitability by simply reducing headcount. By May of last year, Daft was out as CEO, and Neville Isdell – a former darling of Keough – came out of retirement to run Coca-Cola.

Described as “charismatic,” Isdell may be the best man for the job, but it is still too early to see what he can do at this stage to revitalize the brand. Under the leadership of the trio of Goizueta, Keough, and Ivester in the 1980s and much of the 1990s, the shares of Coca-Cola were a must-have and Coca-Cola was regarded as a growth stock. Please also keep in mind, however, that the run of KO during that time also occurred in the midst of the greatest bull market in U.S. stock market history.

Again, readers should recall that I have always contended that we are still in a secular bear market – a bear market not unsimilar to the 1966 to 1974 secular bear market. While indices such as the Dow Industrials, Transports, the S&P 400 and S&P 600 have recovered nicely since the cyclical bear market bottom in October 2002, large caps such as Coca-Cola, Microsoft, or even GE have never really covered, and it is my belief that large caps will continue to underperform once the bear reasserts itself sometime this year. The dividend yield of 2.6% may or may not help, but who would want to hold a “value stock” once the Fed Funds rate is greater than its dividend yield (as of right now, the Fed Funds rate is 2.5%)? I really do not see deep value here. While a P/E of 20 is at the low end of its five-year range, it is interesting to note that Warren Buffett started buying his shares of Coca-Cola in 1988 when the P/E was only 13 (with a market cap of less than $15 billion) – and analysts at the time were proclaiming the stock to be expensive! S&P currently projects a fair value of Coca-Cola at $46, so there is really not a great margin of safety here.

While I believe Coca-Cola is a very strong brand and should be a part of every investor’s long-term core holdings, I do not believe it is a good time to buy at this point. The growth in the stock price of KO was neither due to luck nor coincidence – it was due to Goizueta’s shrewd management of the stock price, Keough’s salesmanship of the company, and Ivester’s financial genius – along with a roaring bull market more than anything else. Despite the lack of leadership in Coca-Cola during the last seven years, part of the old dream of KO being a growth stock has still hung on – for far too long. For KO to be an attractive stock once again, this author will need to see a more compelling valuation, such as a stock price of $25 to $30 a share. At some point, however, I believe KO may be a glamour stock once again (as it still has a lot of potential in China and India where only a total of about 850 million cases of Coke finished products were shipped in 2004, compared to 20 billion cases for the entire world), but not until some of the weak hands have been shaken out from the stock.

Please let us know your thoughts and opinions. Is KO a buy, hold or sell?

Henry To, CFA, is co-founder and partner of the economic advisory firm, MarketThoughts LLC, an advisor to the hedge fund Independence Partners, LP. Marketthoughts.com is a service provided by MarkertThoughts LLC, and provides a twice-a-week commentary designed to educate subscribers about the stock market and the economy beyond the headlines. This commentary usually involves focusing on the fundamentals and technicals of the current stock market, but may also include individual sector and stock analyses - as well as more general investing topics such as the Dow Theory, investing psychology, and financial history.

The stock market has been in an up trend for more than a year. Almost everyone is feeling good and many believe we are back in the old bull market with the previous high of the Dow Jones Industrial Average just about to be broken.

This could be the case, but what if what we are seeing is all glitter and only has sparkle with no value whatsoever. Any one who tells you he knows is either a liar or a fool. Only the market itself will tell what it is doing and very few take the time to learn its language.

The most important thing about the stock market is the major trend. For the past year it has been up and during that time you should have owned equities – stocks and mutual funds. Some time in the future it will turn down again (it always does despite what you broker says) and that is when you should sell your equities and keep your money in a money market account. You won’t be making much, but it takes a lot more effort to make money than it does to keep from losing it.

Brokers will tell you there is no way you can determine the direction of the market. They are either lying or stupid. It is not that obscure. To mine for gold in the stock market I recommend you look at the Investors Business Daily Mutual Fund Index. Notice that the Index price is currently above the 200-day Moving Average. That penetration occurred in April 2003 and had stayed that way until May of 2004 when it broke down.

When that happened you sold everything and went to cash. It went back up through that 200 line shortly after so you should have bought back into equities. Now you are fully invested again maybe in other equities that are performing better than those you had before. Is this a new gold mine or fool’s gold? You don’t know yet, but you will learn that the trend is your friend.

If you did sell out your previous stocks or mutual funds you should have looked to see where you want to buy again. There is something called sector rotation that will definitely increase the return on your money. At times the technical stocks and funds do better than the real estate group or the banking group. You should be where the strongest funds are and these you can find with a search on the Internet.

Don’t be a fool and try to ride out a weak stock or group. Just a few years ago AT&T was $100 per share. Today it is $15. So much for the widows and orphans; they have lost their gold.

What might seem to be a sure thing can turn into a financial disaster - a fool and his gold will soon be parted. Never take a big loss. Listen to the market and learn to stay with the trend.

Al Thomas’ book, "If It Doesn’t Go Up, Don’t Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he’s the man that Wall Street does not want you to know.

Copyright 2005

Starbucks earnings are up again and so is their stock slightly. It appears they are exporting America’s weakness to caffeine and sugar around the world. This seems to serve the company’s profits well and nations like China have quite an emerging population to sell to. Think of the exporting of tobacco and the riches the orient has given. Perhaps this is the answer to our advancing trade deficit. Should you have Starbucks in your portfolio?

Selling drugs has always been a worldwide moneymaker from the Afghanistan Poppies to the Columbian Cocaine. Caffeine is a much milder substance, like some of the other “Ine” drugs such as morphine, codine, nicotine, etc. As the addiction of Starbucks moves across the planet, it might be worth a look into the dynamics of addiction and what this could mean for your retirement investments. Many people have gotten rich off the selling of drugs. After all Osama Bin Laden and the Talley Bandits have been able to use those funds to stave off the most mighty army in the world. The good thing about investing in Starbucks is you do not have to live in a cave and hide out to get a piece of the action.

Excessive sugar in one’s diet we know contributes to early diabetes and in children causes issues with brain functions while they are still forming. ADHD seems to be a problem in our society. So it is better to export it than to have these issues so prevalent here. Just like the tobacco issues and cancer, better them than us. Sell tobacco outside the US and not to our citizens here. Just think you can make money in the stock market by supporting obesity in other nations and be helping our trade deficit at the same time. Think about how good this could be as Starbucks expands to other nations?

"Lance Winslow" - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance in the Online Think Tank and solve the problems of the World; www.WorldThinkTank.net/

Picking a beaten-down stock requires a different kind of selection process. Normally, most companies beaten down this far have no earnings to speak of. Of course, if the company continues to earn money, one can apply normal valuation techniques. By that measure, many of these stocks appear outrageously undervalued: an indication of great buys. But this may also be a red flag that things are "too good to be true".

Another criteria we look at focuses on the breakup value of the company and/or the ability of the company to keep operating in troubled times. For example, debt ratios are important because we want to be sure the company will not be swallowed up in its debt payments. Book Value tells us the value of each share based upon the accountants valuations of assets and liabilities. Sometimes, we also look at cash-on-hand to determine if the company is able to continue as a going concern.

A glance at the high and low price that the shares have sold for in the past may indicate no more than how crazy the market was only a few short years ago. Still, if investors were willing to pay $200 per share for a stock two years ago, it is difficult to believe that it’s worth less than a dollar today. Maybe the reality is somewhere in between.

Openwave Systems (OPWV $1.12, High $208; Buy Aggressively), is the top supplier of software that mobile service providers use to offer text and instant messaging to customers. It also provides mobile Web browsing software. The company, which resulted from the merger of Phone.com and Software.com, develops products providing wireless data transfer and messaging, mobile e-mail, and directory services. A recent acquisition of SignalSoft adds a new product line, software that assists cellular users to locate destinations or other users. The company has a loyal subscriber base, and outstanding growth prospects. Openwave, however, is typical of today’s bargains. Formerly selling as high as $208 per share (no, that’s not a misprint), shares today cost only a little over a dollar. With a book value more than 4 times that amount, virtually no debt, and cash on hand in excess of the stock price per share, there can be no doubt that the shares are now selling at outrageously low prices. We believe these shares represent an outstanding high-risk buy at current prices.

To send comments or to learn more about Scott Pearson’s Investment Advisor Services, visit http://www.valueview.net

Scott Pearson is an investment advisor, writer, editor, instructor, and business leader. As President and Chief Investment Officer of Value View Financial Corp., he offers investment management services to a wide variety of clients. His own newsletter, Investor’s Value View, is distributed worldwide and provides general money tips and investment advice to readers both internationally, and in the U.S.

Over the past few months, several investment professionals have brought up the topic of the down-and-out company of the day and whether to buy now as a speculation. Last year, K-Mart was the big news, and everyone wanted to know whether this was a good stock play. Today the news is focused on WorldCom and its downfall. Thus, some people are pondering this stock for quick profit potential.

Here’s the scoop: Don’t buy WorldCom.

I know! It’s impossible for MCI to disappear: they’re too big, they’re too popular, their service is excellent, etc. That’s the good news that everyone is talking about. But there’s another side a darker side to the story. The company filed for bankruptcy because of their massive debt load, not just because of accounting failures. The accounting failures probably only came to light as a result of the company’s lack of funds.

In the end, it will be the same story as K-Mart. It won’t matter whether K-Mart or MCI survive, the shareholders will not. If the business survives still debatable in K-Mart’s case, but more likely in MCI’s business ownership will be transferred to the bondholders and other creditors by law. This is what bankruptcy courts do. Shareholders get nothing. If you want to gamble on MCI/WorldCom, you might consider their bonds rather than their stocks, although that option may not be great either.

So, is it pointless to look at "down-and-out" stocks as quick turnaround opportunities? Well, we may avoid the "down-and-out", and instead just invest in the "down-and-uncertain". These can be awesome opportunities, but be aware that the risks are sometimes high among these downtrodden firms.

Here is a list of 25 of these beaten down stocks which today sell for under $5. Some are well-known businesses, other names are less commonly known. Some are dot.coms suffering from the fallout of that moniker, while some languish in other areas of high tech. The energy market has taken more than its share of hits since Enron’s collapse, and that industry is well represented on the list. Telecom, still reeling from WorldCom’s collapse, is also present. For variety, the list includes everything from media to education, from international trade financing to pencil-graphite production.

If you’re convinced that buying the beaten down is the best way to make money, this should provide you vastly better choices than K-Mart or WorldCom. Anything on this list is better than those two doomed stocks. While a few are pending investigation (*starred), most have fallen simply because of the whims of the market. Some are even maintaining profits in this tough environment.

With the market in the doldrums, out-of-favor companies sometimes fall more than would be rational. As a result, you might find great buys in stocks like this. But in this market, there are great buys everywhere. The question is when to buy.

Market timing is not necessarily wise, but when the market is falling as harshly as it has been, one can afford to wait until the stock is so low that you are virtually certain it can’t go lower. Some of these stocks have reached that level.

To send comments or to learn more about Scott Pearson’s Investment Advisor Services, visit http://www.valueview.net

Scott Pearson is an investment advisor, writer, editor, instructor, and business leader. As President and Chief Investment Officer of Value View Financial Corp., he offers investment management services to a wide variety of clients. His own newsletter, Investor’s Value View, is distributed worldwide and provides general money tips and investment advice to readers both internationally, and in the U.S.

As GuruFocus updates the stock buys and sells of gurus, Wal-Mart (WMT), the discount retail giant, stands out as the stock with a high ValueRank (7 out of 10). Just recently, Clipper Fund’s James Gipson and T. Rowe Price Equity Income Fund’s Brian Rogers bought Wal-Mart.

Oakmark’s legendary fund manager Bill Nygren was the first guru that bought Wal-Mart. He bought at price of $53 a year ago. Bill Ruane, the Graham-and-Doddsville superinvestor recognized by Warren Buffett, bought about 700,000 shares Wal-Mart at similar price in the fourth quarter of 2004. As the stock price drifted down, he added another 380,000 shares, bringing his total holdings to 1.1 million shares. In the last quarter, James Gipson purchased 2.8 million shares of Wal-Mart for his famed Clipper Fund, and Brian Rogers bought 4 million shares of Wal-Mart for his $19 billion T. Rowe Price Equity Income Fund.

The price of Wal-Mart did not go up, not yet. If an investor buys Wal-Mart today, he pays a lower price than what Bill Nygren and Bill Ruane had paid. If he is patient enough and holds the stock until the price appreciates (finally), he will beat these best investors on this investment.

Is Wal-Mart a good buy? It is certainly a much better buy than it was 5 years ago, when the stock was priced at $70 and a price/earnings ratio of 55. During the last 5 years Wal-Mart’s earnings have doubled, but the stock has fallen to $49, giving it a P/E of 18.

This is what Bill Nygren has to say about Wal-Mart’s P/E ratio: “That’s the same earnings multiple as the market average, that only makes sense if you think Wal-Mart is an average company.” And he doesn’t. Wal-Mart is rapidly gaining market share in its grocery business, and profit margins for its Sam’s Club are improving. Bill Nygren also likes Wal-Mart’s share-repurchasing plan: “We expect to see an increase in share price on a decreasing share base,” he says. “And obviously, the company believes that the stock at this price is an attractive investment.”

Going to Wal-Mart for its “Everyday Low Prices”? Check if its stock is also low priced!

Source: http://www.gurufocus.com/

Dr. Charlie Tian, Director of Research of http://gurufocus.com, the website that tracks the stock picks of Warren Buffett, George Soros and other guru investors like Bill Nygren, Mason Hawkins, Ken Fisher, David Dreman, Martin Whitman, James Gipson, Robert Rodriguez, Ronald Muhlenkamp, Wallace Weitz, William, Ruane, Edward Lampert, Edward Owens, Richard Aster, Jr, Robert Olstein, John Keeley, Brian Rogers and Tweedy, Browne.

Delaware appears to be the place to be if you are a publicly traded company or desire to be a member of the Fortune 500. The state of Delaware has modern laws, a Court of Chancery, and a business savvy government that makes Delaware incorporation easier and more beneficial to the organization. Still, it is important to follow laws and procedures when completing your Delaware incorporation process.

Delaware is home to more than half of all the United States’ publicly traded companies and approximately sixty percent of all the Fortune 500 companies. It is, therefore, not an exaggeration that Delaware seems to be the home to business. Though each company chooses a Delaware incorporation for different reasons, the state prides itself on its “complete package of incorporation services.”

If you choose Delaware incorporation you will be subject to law that is advanced and flexible enough to increase your chances to build a successful business. One unique aspect to Delaware incorporation is that you have access to the 210 year old Delaware Court of Chancery, which is the entity that wrote a significant portion of the U.S. Corporation case law. Plus, you do not have to live in Delaware in order to complete a Delaware incorporation. As long as you have a registered agent in Delaware, you can complete at Delaware incorporation.

One of the first things you need to in your Delaware incorporation process is to reserve an entity name. The state of Delaware makes the Delaware incorporation process easy by allowing you to complete portions of it online, like making name reservations. To reserve a corporate name, you will need to pay $10 per name. However, if you are to purchase a Limited Liability Company, Limited Partnership, Statutory Trust, General Partnership, or Limited Liability Partnership for $75 each.

The next step you will need to take in the Delaware incorporation process is to determine what type of business you will be running. If you will be completing a Delaware incorporation for a general partnership corporation, limited partnership, or limited liability corporation, you will then need to fill out the appropriate forms with the Delaware Secretary of State for Delaware incorporation. Again, Delaware seems to understand the need of business owners that items be convenient and easy to understand, so finding the forms for your Delaware incorporation is made easy through the internet. All the forms you need for Delaware incorporation are on the Secretary of State website.

If you are in a hurry to complete your Delaware incorporation, you can contact the Division of Corporations to use their expedited services. In Delaware, there are a number of services available for 1-hour, 2-hour, Same Day, and 24-hour completion. However, to expedite your Delaware incorporation, it will cost you between $50 to $100 extra.

Read the rest of the article here: Delaware Incorporation.

Download the Home Based Business Manual (Free $97 Value!) and receive valuable tips, strategies and techniques designed to grow a very successful Home Based Business.

Copyright © Charles Fuchs is an established online marketer who specializes in helping people start their very own Home Based Business. He specializes in showing people how Business Leads can help your business.

The excitement Paladin Resources Limited (TSE: PDN) has been quietly generating through the uranium mining sector puts African uranium mining squarely into the spotlight. The country of Namibia, bordering South Africa, Botswana, Angola and the South Atlantic Ocean, is already one of the world’s key uranium producers – supplying global utilities with between six and eight percent of the uranium oxide of the world’s newly mined supply to fuel their nuclear reactors. In an historic development, two sales contracts were recently announced for the purchase of uranium from Paladin’s Langer Heinrich uranium project before the mine has been commissioned (scheduled for opening in September 2006). Both contracts announced eight days apart in late January of this year were each for the delivery of more than 2 million pounds of U3O8 between 2007 and 2012. The company’s news release of January 27th named an unspecified U.S. utility as one of Paladin’s new customers.

Namibia is a uranium-friendly mining country. In October, Mined and Energy Minister Erkki Nghimtina told the country’s National Assembly, “Namibia should consider exploiting its uranium ore reserves in the light of rising world uranium prices.” The country has already been doing so, through Rio Tinto Group’s Rossing uranium mine for the past 25 years, which provides jobs to more than 800 employees. With the addition of the Langer Heinrich, more uranium will be mined.

The Rossing is one of the largest open pit uranium mines in the world and with solid reserves. According to the company’s website, this mine “currently produces about 7.7 percent of the world’s uranium.” The Rossing uranium deposit is an intrusive deposit, with intrusive rocks in this category which include alaskite, granite, pegmatite and monzonites. Around the world similar type deposits include South Africa’s Palabora and Greenland’s Ilimausaq. In South Australia, a similar intrusive deposit – Radium Hill – was mined from 1954-1962.

Paladin’s success story has spurred another junior uranium company, Forsys Metals (TSX: FSY) to press forward with its advanced stage exploration uranium project in Namibia’s Erongo region. Last May, a bottom-fishing investor might have easily bought Paladin Resources shares for under C$1/share (the low was $C0.86). Recently, those shares traded as high as C$3.30/share – a 300 percent (or more) gain in less than twelve months. How does Forsys Metals stack up against the giant Rossing uranium mine and Paladin’s burgeoning Langer Heinrich? Forsys Metals shares today are in the same trading one might have found Paladin Resources less than a year ago. Forsys has initiated a pre-feasibility study on the company’s Valencia uranium deposit, which should boost investor interest if the company makes positive strides toward achieving that target.

Forsys Metal’s Valencia Uranium Deposit

Forsys Metal’s Valencia uranium deposit is located 35 kilometers along geological strike from the Rossing uranium mine and approximately 40 kilometers north of the Langer Heinrich deposit. “This is a granitic uranium deposit (uranium mineralization in granite), that is geologically similar to the Rossing,” said Duane Parnham, Chairman Chief Executive of Forsys Metals. “We’ve completed a National Instrument 43-101 compliant technical report verifying the historical work of Goldfields Namibia between 1973 and 1986. It outlines a historical resource of greater than 20 million pounds of U3O8.” Parnham explained the mineralization is exposed on the surface and the deposit remains open for further expansion. “The Valencia is also a deposit we feel can be moved rather quickly into a production scenario,” Parnham pointed out. “The deposit is amenable to conventional open pit mining methods.”

According to the National Instrument 43-101 technical report filed in October 2005 on the Valencia uranium property by Graham Michael Greenway, a registered geological scientist with South African Council for Natural Scientific Professions, “Uranium mineralization is present at the Valencia Project property as uraninite (UO2) mineralization… Uranium mineralization has been identified over an area of 1,100m north-south by 500m east-west…Uranium mineralization predominantly occurs in the finer-grained alaskite… The uranium mineralization is variably distributed through the alaskite intrusions and in many cases high-grade mineralization is in contact with barren or poorly mineralized alaskite.”

The Valencia project area is situated in the Central Zone of Africa’s Damara Orogenic Belt. This belt belongs to the late Precambrian, early Palezoic and Pan African Mobile Belt system that run across the African continent. Medium to high grades of metamorphism and voluminous granitic intrusions characterize the Central Zone. In a 1992 report entitled Uranium: The Mineral Resources of Namibia, published by the country’s Ministry of Mines and Energy and the Geological Survey, geologists Roesener and Schreuder wrote, “All of the uraniferous granitic occurrences discovered in Namibia are situated in the Central Zone.”

The geology is similar to the Rossing uranium mine, according to Duane Parnham. Greenway suggested geological similarities as well. In his resume, Mr. Greenway disclosed he had completed a Minerals Resource estimate for the Valencia project, while in the employ of Rossing Uranium Ltd. Having graduated from South Africa’s University of Natal, Greenway has worked for 15 years as a geologist, ten of those years spent evaluating and calculating mineral resources. In his conclusion filed in the National Instrument 43-101, Greenway wrote, “The Valencia Uranium Project contains an alaskite hosted uranium deposit similar to other uranium deposits found in the Central Zone of the Damara Orogen. The main zone of mineralization is 520 meters wide, 720 meters long, and 200 meters thick and occurs from surface down to a depth of 360 meters.” Greenway estimated that at a cut-off grade of 017 kg/t U3O8, the currently defined inferred mineral resource at Valencia is 32 million tonnes at a grade of 0.22 kg/t U3O8.

Evaluation

Where water costs are high, uranium mining can become costly and uneconomic. Forsys Metal’s Valencia property is admittedly in a desert region. Distant water would require a pipeline. For example, the current pipeline to the Rossing uranium mine requires 2 million cubic meters of water daily pumped to it. Mr. Parnham does foresee this as a potential hazard, but believes the pipeline to the Rossing mine could be extended to the Valencia deposit, should it become a producing uranium mine. The Langer Heinrich also has a pipeline to pump the precious in order to mine the uranium. However, with that concern, there is the flip side. The Rossing mine reportedly produces uranium at less than $20/pound. Some estimates reach as low as $12/pound, but at a rising spot uranium price seemingly destined to top $40/pound, any production cost under $20/pound, in sufficient quantity, could be bankable. One uranium insider suggested the Rossing may be in the process of expanding its uranium production, because of the soaring spot uranium price, to as much as triple its current capacity.

The problem with water might be solved in the context of Namibia’s energy import climate. Currently, the country reportedly imports about 80 percent of its power from South Africa. The controversial Swakopmund desalination plant, first announced in 1998, might be revived to meet the country’s growing water requirements. The country may need to drill more water wells. In any event, miners can become creatively inventive when faced with environmental concerns in order to produce their commodity. In this case, helping Namibia solve its water issues could very well help that country accelerate its industrial growth strategy.

Based upon the rising monthly value in his company’s potential asset, brought about by soaring spot uranium prices, Parnham doesn’t mince words in spelling out the direction Forsys Metals is heading, “We think we have a situation whereby we can fast-track a pre-feasibility stage by conducting some limited amount of verification drilling and geo-tech drilling, and then make a formal decision to move immediately into a bankable feasibility stage.” How fast can Forsys Metals move forward? In the case of Paladin Resources, they fast-tracked their project forward in less than two years. Will history repeat itself with Forsys Metals? Stay tuned.

COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.

James Finch contributes to StockInterview.com and other publications. StockInterview’s “Investing in the Great Uranium Bull Market” has become the most popular book ever published for uranium mining stock investors. Visit http://www.stockinterview.com

Blockbuster (BBI) is a perfect example of what can go wrong when you misread the industry trends and then realizing it, try desperately to catch up. In the period from late 2001 to 2002, Blockbuster was the leader in the video rental business. Its shares were trading at nearly $30 a share and its market-cap was at around $5.75 billion.

But there was a trend developing towards movie rentals via the Internet. Blockbuster failed to recognize the growing significance of Internet video rentals, a very poor miscalculation on its part. The shares have steadily declined to the current $3.80 to $4.20 channel. Once a large-cap, Blockbuster is now a small-cap and struggling to regain any sense of direction. The company has entered into the Internet DVD rental business but it has a lot of catching up to do.

Fundamentally, Blockbuster has lost money in the last three straight quarters and struggling to grow its revenues, which are forecasted to increase a mere 1.1% in fiscal 2006. Its estimated five-year earnings growth rate is a mere 2.5% per year, which is pitiful.

Blockbuster also has to deal with its massive debt load of $1.27 billion or a debt-to-equity of 2.73:1, which suggests a weak balance sheet. Couple this with poor working capital and you understand the high financial risk. Faced with stagnant revenue growth and losses, Blockbuster faces a difficult upside battle to regain its lost glory. The odds are stacked against it.

In the face of Blockbuster is online DVD rental company Netflix (NFLX), which debuted in May 200, trading at close to $40 in 2004 before sinking to the $10 level in 2005 before the rally.

Netflix saw the future for DVD rentals and it was online and not via the “brick and mortal” route that Blockbuster decided to maintain. In direct opposite to Blockbuster, Netflix is profitable and has been for the last three straight quarters. It has 4.2 million subscribers and growing. Its revenues are growing and expected to surge 32.5% in fiscal 2007 whereas Blockbuster is seeing non-existent revenue growth.

Blockbuster has entered into the online DVD rental arena but it is well behind Netflix. Moreover, Netflix also operates the online DVD rental business for Wal-Mart Stores (WMT), after the retail giant decided to shut down its own online DVD rental unit and instead let Netflix run it.

Trading at 36.73x its estimated FY06 EPS, Netflix is not cheap. But if it can continue its strong growth and earn the estimated $1.11 per share for the FY07, the valuation becomes more reasonable. The pressure is clearly on Netflix to deliver but it is on the correct path.

Note: you are welcome to post this article on your site if it is financial related. You must cut and paste the bio and make sure the web site link is live. Also please e-mail me to let me know.

George Leong is the founder of Investornomics.com (http://www.investornomics.com) - a provider of independent stock and option trading commentary. He has a degree in finance/economics and offers over 15 years of research experience in investing and trading.

Lucent Technologies Inc. (NYSE/LU) is a stock that needs some major loving. This former Wall Street darling has been discarded by the herd and is now looking for some love on the Street. Trading at nearly $80 in late 1999, the stock like many others in the communications sector has been under severe pressure in recent years, facing lackluster revenue growth and anemic profits.

Lucent has also gone through its share of lawsuits. Despite some recovery in the communications sector, the area remains a difficult place to operate. The competition is fierce, pricing pressures are growing, and margins are low.

That is the reality for the communications sector, an area that remains in limbo given the current climate. So what is Lucent suppose to do? Shareholders have lost patience in the ability of chairman and CEO Patricia F. Russo in turning around the company and making it a star again.

Down 96% from its late 1999 high, the reality is investors who bought at that level or even lower will probably never recover their losses. Lucent will never be more than a capital loss for those that purchased at the higher and inflated prices.

The company is making money and its forward price-earnings multiple is reasonable, but given the slow expected growth the stock’s upside may be limited.

Given the mixed outlook for the communications sector, Lucent is trying to get a major hug from rival and also troubled France-based Alcatel SA (NYSE/ALA).

Lucent after being rejected already by Alcatel in 2001 is hoping this second attempt is met with hugs and kisses, something they love to do in France.

Alcatel is reviewing the potential merger with Lucent, but it is in the driver’s seat as its position is much better than that of Lucent. In other words, Lucent needs Alcatel more.

But for Alcatel, a merger with Lucent could give the company more exposure and an established network in the United States.

The deal if consummated could be the first of many more to come as struggling telecom companies look for ways to cut cost and compete more effectively.

Note: you are welcome to post this article on your site if it is financial related. You must cut and paste the bio and make sure the web site link is live. Also please e-mail me to let me know.

George Leong is the founder of Investornomics.com (http://www.investornomics.com) - a provider of independent stock and option trading commentary. He has a degree in finance/economics and offers over 15 years of research experience in investing and trading.