A small cap on WSE

Today, we'll talk about a small Company, rated at WSE: ALLURIS ESTATE (ALL).

The core business of ALL is in houses and their mission is to offer low fee rental in addiction with a high quality assistence to the costumer.



The financial report concerning March 2007:

Company: Alluris Estates (ALL)
Chief Executive Officer: Ox64 Sachs
Company Website: http://www.allurisestates.com
Shares Outstanding: 813,600
Shares Floating: 121,945
Float %: 14.99

Valuation Measures:

Current Price (L$): 0.90
Market Capitalization (L$): 732,240.00
P/E (Price/Earning per share): 13.51
Payback ratio (Price/Dividend per share): 15.01
Earning Yield (EPS/Price) : 6.83%
Dividend yield (DPS/Price): 6.66%
Dividend Growth: 121.26%

The shares outstanding is 813,600 shares that, at the current price of 0.90 L$ per share, return a result of 732,240.00 L$ of market capitalization only. The floating shares amount to 15%.

The dividend yeld is 6.66%, but with a dividend growth referred to the month of February of 120%. If this item should have been confermed even at 50% in April, the earning would be of 10% about. Our evaluation is however positive.

Un fortunately, during March the Company communicated only earnings and dividends, but not the others fondamental items too as incomes, expenses, cash flow, Buildings, Building's value and debits.

I wrote some days ago to support@allurisestates.com asking for these important items, but untill today, I didn't receive any answer. This morning I asked Miss Nissa Sullivan, manager of ALLURIS these notices via IM and now I'm waiting for an answer.

P.S. To give periodically a complete financial report is surely a sign of more trasparency and respect to the shareholders. Unfortunately these missing financial reports are a common matter for many of the societies traded in WSE.

Pasha Boucher
Translation by Mr McCoy Ducatillon

Games Ltd (GAL)

GAL is a company that developes games for casinos and other gambling clubs, two very active sectors in SL.

The shares got a first time qotation of 25 L$ each, caused by the initial euphoria in the first weeks, with a capitalization of 250,000,000 L$. Therefore, this value has been strongly reorganized, arranging around a good 2 L$ support base per share.

The hard reduction has been a direct consequence of recent F.B.I.'s inquire over gambling in SL, upon Linden Lab's demand.

Let's have a look over financial details:

Company: Game Ltd (GAL)
Chief Executive Officer: Don Montale
Shares Outstanding: 10,000,000
Shares Floating: 2,000,000
Float %: 20.00

VALUTATION MEASURES
Current Price (L$): 2.00
Market Capitalization (L$): 20,000,000.00
P/E (Price/Earning per Share): 12.90
Payback ratio (Price/Dividend per Share): 14.29
P/S (Price/Revenue per share): 9.90
Earning Yield (EPS/Price): 7.75%
Dividend Yield (DPS/Price): 7.00%

As we can see above, the whole capital of the company amounts 10,000,000 shares, divided into 8,000,000 shares on owners' own and 2,000,000 floating in the market.

With a value of 2 L$ per share and having a look over the financial report of last March, we can obtain very interesting numbers.

With a payback ratio of 14.29 (time occurring to recover the initial investment), and a dividend yeld of 7% (monthly gain rendering concerning the capital invested), GAL can confirm to be one of the best companies present in WSE market, mostly if it would confirm, in april, a good economic course.

Pasha Boucher
Tanslation by Mr McCoy Ducatillon

Delicious Demar Enterprises (DDE)

Today we will talk about DDE, a company listed on WSE which delivers dividends weekly.

The company, as declared in the IPO documents, runs 4 businesses: real estate, design, casinos and commercial prefabs. Outstanding shares consists of 1,000,001 stocks, 500,000 of which are available on the market (Float.)

It was listed on 16th march at 1L$ per share, which means a market capitalization of 1 million L$. Assets value are more then 4 million L$ (295,000 sqm in land), February earnings 320,000 L$ and a 20% payout. So market capitalization was only three times the monthly earnings. This has happened also on WSE!

DDE has regularly delivered dividends (5 times). In the last four weeks it has delivered more than 100,000 L$ dividends, or 20% of its earnings (500,000 L$).

Based on this amazing results, PB Asset Management has invested on the company. Now DDE is priced at 3.2 L$, but we think that the market has still to find a higher right value.

Pasha Boucher
Translation by Mr Jo Bleac

The dividend

The dividend is the part of profit that a company delivers to its shareholders, usually paid in cash.

In a virtual atmosphere, like that one of SL, with a virtual stock market exchange (WSE), in which the rules are not so good, a company that periodically distributes a dividend is positively “reliable” (if one can talk about reliability in SL).

Currently, there are 45 companies quoted on the WSE and approximately 15-20 of them have already distributed some dividend.

Of course, we will see how regular this companies will be able to be as far as dividend delivery is concerned.

In the evaluation of a company, the Pb Asset Management filters the companies with a low price/dividend ratio, determining in this way which titles are more convenient to invest/trade/play.

Ps: The frequency of distribution of dividends is somehow arbitrary: there are companies which distributes their dividends monthly or even weekly.
The Pb Asset Management, for the its own investments, considers the price/dividend ratio on a monthly base.

Pasha Boucher
Translation by Mr Jo Bleac

Panic selling on Hope Capital Ltd (HCL)

Written on April 13, 2007

Hard market day for HCL group, that has burned 50% of his market value. Only yesterday the HCL title quoted 3L$ per stock, but in the last 24h the title has touched the value of placement that is 1L$ per stock, as one month ago.

Everythings started yesterday in the evening when 4 million stocks appeared on the book sell side, every stock divided in orders of 200.000/300.000 pieces at prices included between 2.90 and 3.50 L$.

Now, if we consider that the HCL consists of 25 millions shares, it was very disappointing for the investors to see such a selling pressure on the stock. This high pressure started the panic selling: everybody started selling! A high selling volume with 1.3 million stocks exchanged at a price included between 1 and 3.29 L$ per stock.

But, who is HCL group?
The prospect is clear: they are the WSE owner, at 100% since few weeks ago, furthermore they have other activities such as Our Bank LTD., a second life bank.

Let's try to evaluate HCL group: we have said that the company consists of 25 millions shares, and if we consider price swinging in the last 24h(min 1L$, max 3.29L$) we can obtain a capitalization included between 25 and 82 million L$.

The WSE take 3% of commission on the total value of each contract, and if we consider that in the first month (as reported on their site) a total market value of 129 milion of L$ was registered, we obtain 3.8 million L$ per month revenue. If we project this revenue on an annual base we have 46 million L$; add the positive increase of the market, as the economy of SL grows up at a 10-15% monthly.

Unluckily, we do not have much info about the other activities of HCL group and about the mothly costs. Nevertheless, we can make an annual projection with capitalization/return statement included between 0.54 and 1.78.

Each of us draw her own conclusions!

Pasha Boucher
Translation Mr Paky Mariani

Fundamental Analysis

Ever since my first day in SL I asked myself how I could valuate companies quoted on WSE, in order to choose which company I would invest into.

A company annual balance sheet in RL is what you need to estimate a company value, or else it is enough to visit any specialized web site to read the major indexes and compare them with other companies in the same segment.

In SL, expecially as we are talking about WSE which is a young market, there is no such thing. Only available info consists of the companies own statements and there is no real control office. In any case some numbers are there to be found: look at the "research" section on the WSE web site. For each company you can find there a synthetic report, all the company statements, and the history of dividends (some companies have started distributing dividends as often as weekly.)

During the first days I read many reports, but I could not find any news about dividends, which in my opinion is the only way to find out whether a company can be trusted. After that I decided that the only way was to invest on a variety of companies, choosing in the first place those companies which could sport a decent capitalization to asset ratio ... and I could not find many of these.

Just to show one example, the first company in the section research is named A.M. Sports Bets (AMS). On the synthetic report it is stated that there are 50 million stocks (Outstanding Shares: 50,000,000)and the company owns assets for L$ 1.216 millions. The stock was quoted at L$ 1 per share at launch, then with an initial capitalization about 50 millions lindens!!!!You've got it wright: 50 millions L$, that is around 140 thousand EURO! (Is there any one still thinking tha SL be just a game?? :) ). Capitalization/asset ratio =50/1,216=41. I have sorted the companies on the base of this ratio, preferring those with a lower value.

This is the first parameter that I looked For the next one, don't miss my following posting ;)

Pasha Boucher

Translation by Mr Jo Bleac

Welcome!

Welcome to the first italian blog about the stock market exchange in Second Life.

SL is a virtual world 3D created by Linden Lab, today there are more than 5 million subscribed members, with a strong economic growth around 10/15% per month. The stock market exchange is open since March 5 and today there are 40 companies.

In SL my name is Pasha Boucher and in RL I follow financial stock exchanges every day. On March 7 I have created a close private equity fund (asset 350000 L$) managed by Pb asset management. This company belongs to SL and I have founded it.

The blog is meant to inform and update the reader, and to analyze what is happening on the stock market in SL. I will also report on my own operativity on the WSE market.

This is going to be a mean to share my passion in Second Life and my passion in financial markets, to offer thoughtful insights on several aspects of the market, for example on rules and on fundamental analysis. It is aimed to become a reference for investors/traders/players.

Pasha Boucher
Translation by Mr Jo Bleac