Shares of Plandai Biotechnology (PLPL) traded light on Tuesday even after the penny stock became a recommended “BUY” in the recent KonLin Letter. PLPL stock traded triple the 20-day average volume, 51,504, but failed to capture the short-term message of Konrad Kuhn who anticipates Plandai’s income for 2012-2013 to reach $27 million, tripling to $90 million within the next 5 years. At 0.1676, it’s nearly 30 cents below the valuation price.
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PLPL Stock Chart
Close: 0.1676, up 0.0176 (11.73%)
Volume: 163,117
Open: 0.165
High: 0.22
Trades: 64
Average Trade Size: 2,548
The Company’s principle holdings consist of land, farms and infrastructure in South Africa which are encompassed in the following entities:
• Dunn Roman Holdings Africa (Pty), Ltd – 81% owned by Global Energy Solutions (GES), an Irish company that, through its subsidiaries, controls over 8 thousand acres of plantation properties in South Africa
• Breakwood Trading 22 (Pty) Ltd. – 74% owned by Dunn Roman Holdings-Africa
• Green Gold Biotechnologies (Pty) Ltd. – 74% owned by Dunn Roman Holdings-Africa
The reason this matters is because there are 110,495,300 shares outstanding as of May 21st, 76,000,000 of those were issued to acquire GES leaving just 34,495,300 for the estimated float. Dunn Roman Holdings Africa (Pty) Ltd, a subsidiary of Plandai, is rumored to be under a new contract to acquire tomato paste for ZZ2 which will be processed to recover highly bio-available antioxidants using the company’s exclusive Hydronamic Extraction Technology.
This deal alone could add in excess of $700,000 in monthly revenues for Plandai.
The Company’s processing approach follows 10 years of research and technology licensed from Caldar Valley Limited, and that they secured a $13 million none convertible loan from the South African Land Bank, an agency of the South African Bank, without any convertible stock or future stock dilution.
I highly doubt that the South African bank is going to invest on a #2Flusher company with no foreseeable growth forecast.
In the Company’s investor presentation, PLPL reports a $50 million recent valuation of the Company, with income growing to $27 million in 2012-2013 and $90 million within 5 years, and net profit growing to $19 million by 2017 and $90 million by 2020. That’s not hard to view since the global tea market has doubled over the last 10 years (see here) and is estimated at over $50 billion while Vitamin Shoppe estimates the U.S. nutritional supplements industry alone is over $29 billion, and growing at 5.4% per year.
With approximately 110 million shares outstanding, a valuation of $50 million implies a current PPS of approximately 0.455, 0.2874 below PLPL‘s current price.
About PLPL Stock
Plandaí Biotechnology, Inc., through its recent acquisition of Global Energy Solutions, Ltd. and its subsidiaries, focuses on the farming of whole fruits, vegetables and live plant material and the production of proprietary functional foods and botanical extracts for the health and wellness industry.
Plandaí has a proprietary technology that extracts a high level of bio-available compounds from organic matter including green tea leaves and most other organic materials. PLPL‘s extracts from live plant material provide 6X – 8X more bio-availability than green tea extract which sells at an average price of $500/kg.
Click here to view the SEC filings for PLPL.
Bottom Line: PLPL is staying on the list of penny stocks to go long on since there are simply too many factors to consider this a no brainer. Yes, the bank in South Africa could get the shaft, as could shareholders, but as hard as it is to get a loan in a first world country for a Company with a history, it is more likely than not that Plandai is going to produce just like they have down for nearly 70 years.
Consider that Plandai’s corporate history dates back to 1942 in the food processing industry having even produced and distributed meat products for the Hebrew National® Deli line in the New York Metropolitan area, as well as private-label Sabrett® Hamburgers for Marathon Foods.
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