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PKT.V - Parkit enterprise


snowball82
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I bought Parkit enterprise few weeks ago. Market cap is 5 M$ and PKT's part of Canopy asset worth 11 M$.

 

PKT($ 0.32) is a cheap stock  to follow closely :

 

1) The company has a new business model and should start a new real estate acquisition fund soon with focus on parkings lots. If they do that we can expect more earning from fees, distributions and equity upside. www.parkitenterprise.com/investors/PKT-2ndTranche-CorpPres-April20140416.pdf

 

2) Canopy, the first parking facility in Denver has been a success, cost about 19 M$ and now worth +/- 38 M$... and continue to generate great cash flow.

 

3) Parkit has a strategic partnership with Propark, one of the 10 largest parking operator in the US.  The long-term vision of the leaders is to establish a company with several funds under management www.hartfordbusiness.com/article/20140407/PRINTEDITION/304039931/propark-gears-up-again-to-expand-us-parking-assets

PKT as co-general partner plans to have $500 million in assets in four years.

 

4) Insiders bought. www.canadianinsider.com/node/7?menu_tickersearch=pkt

 

5) The main risks related to raising capital will be clearer soon. The company should raise capital in the short term and to implement its growth plans.

 

Based on Canopy asset and first fund, minimum present value is $ 0.60 and if the company have more than one funds, EPS should be very impressive. If Parkit is co-manager of several funds and they manage $ 500 M assets 4-5 years from now like they would, this stock should be baggers.

 

 

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http://cdn.memegenerator.net/instances/500x/49103094.jpg

 

sorry coudlnt resist :P

 

But why should it be worth 60cents now? Negative equity, and it is making a loss now. Is there something im missing here.

 

Thanks for the photo. The company wrote (p.5) they could earn 65 M$ in 5 years and cost are low ... They have only 3 managers based in Vancouver. What is this company worth to you?

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I wonder if there's a comparable company like Parkit out there for valuation -

 

$65M/year in revenue in 5 years  (2019) -- can we assume a 10% margin? And an earnings multiple of 10? So that'd be very good based on current MC - however, will they need to raise new capitals along the way?

 

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Gary, well I don't see cost for Parkit will be very hight. Propark partner can manage parkits lots and they have the infrastructure. Rick Baxter and Patrick Bonney did right things with Canopy, probably the best comparable is this Parking lots. The stock is so cheap at 0.30-.32.

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+ 18 % at .40 Mr market was happy today ... and the company announced tonight they closed its financing with a $1 M in the second tranche for an aggregate amount of $2,3 M between its first and second closings.

 

"An additional six assets should form part of the first-close portfolio identified for acquisition by the Fund. "

 

Parkit will earn fee income and a carried equity interest in the assets as co-general partner. If the general partner charge 2 % annual fee + acquisition fee + equity interest and they can have fund up to $ 500 M (or $ 1B), this company have a huge long term potential.

 

Opinion ?

 

Disclosure : I bought in PP and open market.

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I wonder if there's a comparable company like Parkit out there for valuation -

 

$65M/year in revenue in 5 years  (2019) -- can we assume a 10% margin? And an earnings multiple of 10? So that'd be very good based on current MC - however, will they need to raise new capitals along the way?

 

To reach $ 500 million assets 4 years from now... The company will have to execute the business plan and add $100 million in parking lot assets every 9 months. Time will tell if the management can do that.

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well i dont know what to think about it. It seems they will have very heavy leverage? And I dont know how profitable or stable these parking spaces are. And how much risk there is. But insider buying seems to indicate there is something there. What I also don't like is liquidity because of the size.

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well i dont know what to think about it. It seems they will have very heavy leverage? And I dont know how profitable or stable these parking spaces are. And how much risk there is. But insider buying seems to indicate there is something there. What I also don't like is liquidity because of the size.

 

Ya, If this now 7 M$ market cap has 500 M$ assets undermanagement, just curious to know what you think book value could be five years from now.

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yeah it all depends on the spread I think? Seems they will be very heavily leveraged, so what kind of return on capital does a parking space get? 5% or 15%? Seems the higher and more risk free this return is, the safer this is. And if there is a high return then the value here lies in untangibles like relationships, unique opportunities and connections management has to buy those spaces for a good price?

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  • 1 month later...

Q results released yesterday evening. I like 24 % increase in sales, cy turn cash flow positive,

Canopy results improving & futurs excess cash distribution to Parkik over next quarter, better balance sheet.

 

The company is now ready for the next step. Will be interesting to see new fees revenues from the first fund. Value investor should take a look about the market value of Canopy below :

 

 

OVERVIEW

Parkit is a listed private equity real estate company. Parkit’s business activities focus on the acquisition and aggregation of US income-producing parking facilities. The Company has created a parking acquisition fund (the “Fund”) through which it will partner with other money partners and institutional capital. The Fund will have a focused strategy of acquiring off-market parking real estate over the coming five years. As general partner and portfolio manager, Parkit will earn management fees and equity upside across the portfolio. The investment strategy combines income-stability with value –add, equity-upside for shareholders and limited partners.

In conjunction with this strategy, Parkit has identified seven assets totaling $84 million for its first close portfolio. These assets are expected to generate strong cash yields and leveraged returns in accordance with the Company’s investing criteria.

Parkit is also the lead investor of Canopy, a 4,200 stall, LEED Gold certified parking facility at Denver International Airport. The asset’s steady improvement in cash flows (trailing 12 month EBITDA of circa US$2.6 million) has resulted in a substantial increase in Parkit’s assets. Appraisals completed for financing purposes valued Canopy at US$38.0 million in November, 2013, and US$44.0 million upon stabilization expected in 2015.

Our strategic partner, Propark America Inc., (“Propark”) is the operator of the facility. Senior executives are alongside Parkit as co-general partner in the Fund. Propark manages 425 facilities across 51 cities and 15 states and has a 30 year history of managing and developing parking facilities.

 

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  • 2 weeks later...

Welcome Gary17

 

Up 100 % is good and the company didn't start the first fund... so, earning power is coming.

 

Like some here, we try to execute the Gretzky quote for our portfolio  (easier to quote him than doing it on the ice !) ...

 

A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.

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Also if the goal is to start a PE fund, why not just sell the asset at a premium and use the proceeds to establish the fund? That way the track record (acquiring distressed asset and selling at a huge premium) is argubly more impressive and they don't have to dilute the stock to finance the growth. Am I being too naive?

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I see that they did multiple financings in the last few months below 0.50, some of which has been used to pay off debt. If the stock is so cheap, why now?

 

Also do you know if any of the warrants trade?

 

Thanks for the idea

 

Probably a good idea to clean the balance sheet before trying to raise 150 M$. We have the Canopy value as downside protection and the assets management is the upside. I got my warrants in one private placement.

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i don't believe the warrants trade.  i'd say if the price drops back to $0.50 might not be a bad idea to buy; or wait and see the price action after they start the fund and see what the earnings are like -  there's lot of room for growth if management can do what they say.  don't chase this... there's certain to be volatility.

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i guess i was really wrong here haha. I still don't get where the value is tho.

 

Market cap is 12 M and they wrote this in the corporate presentation :

 

"PKT will earn income from acquisition fees; management fees; limited partnership interests and equity upside. In total this could earn PKT $65 million in 5 years."

 

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i think that probability is no different than a lot of different investment ideas discussed on the board...    you just need to buy cheap enough so there's sufficient downside protection / margin of safety.  i'd say before they setup the fund the only valuable asset is their one existing parking facility - Canopy ... & they raised money to pay down the debt.    Now  that the price has gone up, I'd wait to see if the fund is setup & what potential earnings it could bring before making another investment decision on this. 

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