Phoenix Associates Land Syndicate (PBLS.pk)

Introduction:

Founded in 1978 as a gravel mining company, Phoenix Associates Land Syndicate would eventually find itself bankrupt in 2001. Yet as the name suggests, the Company would rise again to rejuvenate its enterprise having acquired over 20 companies in the few short years to follow becoming a vertically integrated operation that presently (as of 6/30/07) retains $131 million in total assets. Pertaining to the present fiscal year, Phoenix reported to make $4.88 million in pretax income off of $14.6 million in gross profit for the six months ending June 30, 2007. As of the ending share price of October 4, 2007 Phoenix held a current market capitalization of $13.4 million.

Phoenix Associates Land Syndicate (PBLS.pk) - $0.0055 (10/4/2007)

2,429,362,328 O/S (10/4/2007) – according to Transfer Agent.

2,500,000,000 A/S (10/4/2007) – according to Transfer Agent.

Market Capitalization (fully diluted at current share price): $13.75 million

2007 Mid-Year Financial Results

Nevada Secretary of State Company Listing

Press Releases

Why this is a bad investment:

To first understand this company, it’s a good idea to understand why this company is a bad investment. Having been listed under the Pink Sheets, Phoenix has long evaded the transparency demanded by its investors while simultaneously reassuring that its commitment to open its fiscal doors was imminent. Yet in a progressive step to an otherwise futile word-game, Phoenix recently ungagged its Transfer Agent and publicly released internally-prepared financial results.

Phoenix’s share price has also dwindled over recent months in light of high pressure dilution. Over the course of a little more than a month, PBLS stock was diluted approximately 10% (250 million shares) on a daily basis casting a heavy sell pressure over the stock. Such dilution is unnerving to weary penny stock investors who fear fraud. Even with fraud ruled out of the picture, such an action could be equally disturbing when wondering why the company would need the cash it rose through dilution. As of 9/28/2007, the dilution has stopped for now.

In light of the last fact, it's noteworthy to mention that cash flows appear to be a problem for the company. This may be reasonable considering the expenses it must incur to expand its operations. The recent press release regarding the sale of Best AeroNet also vindicates this assertive deduction that the Company has greater need for cash on hand than venturing into another channel of revenue. Based on the rapid expansion of Phoenix as it continues to acquire companies, it is possible to believe that overexpansion may have led to difficulties in company consolidation. It is also possible that the Company allowed for loose regulations over revenue collection thereby clogging the pipelines of cash flow.

Legal ramifications behind the Murphy Sand & Gravel pit, a vital money-maker for the Company, may ultimately strip Phoenix of an important asset. The most recent update on the court case was a blow to the Company, although it appears that the asset itself will be operational and retained until further litigation is settled. An appeal process may again vindicate Phoenix, who has already won one appeal regarding the case.

Last of all, the need for verification remains a problematic issue albeit less of a problem than most penny stock companies. In the case of Phoenix, specific verification for contracts and third parties (rather than proof of the company’s own divisions and assets) remains elusive. Of greatest concern, the recent $6.6 billion revenue contract with Komex has been displayed with little proof (not “no proof”) of existing despite the massive size of the contract itself. Despite the seemingly absurd amount of revenue involved, there has been hope in the fact that some who have visited the Company have personally met the newly added individuals who were involved with this contract. Nevertheless, investor doubt has helped tumble the share price despite the promise of a such a lucrative possibility.

Why this is a good investment:

Comparative Advantages:

In my opinion, the Company has two major comparative advantages which reside in the Murphy Sand & Gravel pit and the Best Jets companies respectively. After Hurricane Katrina hit New Orleans, MS&G became the region’s new gold. With all the re-construction that will be necessitated in New Orleans alone, sand and gravel demand has skyrocketed and ought to stay well above normal levels for years to come. Residing right outside of New Orleans, the MS&G pit that was once evaluated to be usable for the next 20 years now looks to be exhausted in less than half the time. The pit’s location significantly reduces and likely nullifies the impact of any competition that may have existed prior to the disaster.

Best Jets offers another unique comparative advantage in an entirely separate industry. In summary, the advantage could be found in this press release (http://www.pbls.biz/pressrelease_content.asp?prid=79), and is highlighted by this quote: “Recently, General Electric announced a “Propulsion Modernization Program” (PMP) for these engines that double the time between overhaul (TBO) from 5,000 to 10,000 hours and the “Hot Section” inspection interval from 1,000 to 2,000 hours. Best Jets has been working closely with General Electric to become the only engine shop authorized by GE to perform the modernization upgrade on engines in the civilian market. GE originally developed the PMP for the US Air Force, where these engines (under the moniker of “J85”) provide propulsion for the T-38 Jet Trainer. They plan to keep the engine in service though the year 2040.”

Vertical Integration Model:

Phoenix’s business model appears to be one of rapid growth through acquisitions, diversified revenue streams, and yielded synergistic returns through vertical integration.

As seen through companies in industries varying from Mining, Trucking, Gas & Oil, Construction, Real Estate, Aircraft Refurbishment, and etc., Phoenix has managed to spread the risk of its revenues while simultaneously utilizing its own resources to reinforce itself. It's for this reason that Phoenix’s trucking company transfers its owns sand pit’s payloads, why its leisure construction division can enhance its real estate, why its concrete crushing facility will receive a steady flow of raw material from its own mines, and even why traveling between waypoints can be reduced through use of its own private jets. These are just some of the ways that Phoenix is able to help sustain itself and enjoy the benefits of synergy.

Verifiable Indications:

What appears on paper means nothing without the proof to provide reasonable belief that everything is as it’s said to be. This is always the case with pink sheet stocks. Yet, we are fortunate to have willing shareholders who go beyond the call of duty to be reassured of their investments. In the case of Phoenix, many investors have visited various facilities over the course of the past few years to verify ownership and operations.

Here are some photo collections from one shareholder: http://home.comcast.net/~new.p/pblsone/

Just as important as seeing the actual operations, having the company commit to what it says it will do is vital. When it came to a share buyback more than a year ago, the Company followed through on its promise. Checks were sent out to investors who followed through with the company’s buyback plan.

Conclusion:

With a fully diluted market capitalization of $13.75 million at the current price ($0.0055) and a "likely" (I use this term because just maybe this company really has been a fraud for 30 years…) true valuation of the Company’s $131 million, there is nothing that I can say that would emphasize how undervalued this Company is at this price level. With a likely positive net income of $4.88 million for half the 2007 fiscal year, the Company has a share price of 1x P/E. With a mere P/E ratio of 5 as which might be considered reasonable for the Pink Sheets, the Company’s stock should be valued at $0.02/share. Given its precedence, it is highly likely for this to occur in due time.

ALL of this article has been taken from a very conservative outlook, having considered full dilution and the mere “core operations” of the Company (that have been commonly accepted through reasonable belief to be in existence). It neglects the one factor that ought to favorably tilt the scale of risk involved: The recently enacted/signed/proposed (pick one) contract with Komex which was valuated to be worth $6.6 billion over 5 years time. Even if the contract is made null, the possibility for future contracts is left open. However, it was the announcement (rather the lack of follow-up) of this contract coupled with dilution that brought about the most recent downward spike of the share price. The very share-price floor that had been so perfectly drawn less than a few months ago was broken briefly on Oct 3, only to be re-established on Oct 4.

Nevertheless, taking this possible contract out of the question, we are left with the very probable truth that the Company’s share price must ascend once again on a reasonable valuation of the assets and deals not currently in question.

Suggestion: Buy.

Companies Owned by Phoenix :

(courtesy of the I-HUB message board)

Phoenix Associates Land Syndicate, Inc.: 504 Water Street Madisonville, LA 70447
http://www.pbls.biz/
ProGas, Inc.: 226 East Gibson Street Covington, LA 70433
http://www.progasinc.com/
Sam's Oil Country Inspection Services, Inc.: 1509 Hwy 135N Kilgore, TX 75662
http://www.iedds.com/
CM Ideal Energy Services, Inc.: 1509 Hwy 135N Kilgore, TX 75662
TCB Properties U.S., Inc.: 1534 Scenic Gulf Drive - Suite 13 Miramar, FL 32550
3-D Builders, Inc.: 504 Water Street Madisonville, LA 70447
3-D Creations, Inc.: 504 Water Street Madisonville, LA 70447
Bayou State Trucking, Inc.: 504 Water Street Madisonville, LA 70447
Ann Arbor Pool Builders, Inc.: 522 North Maple Rd Ann Arbor, MI 48103
Mid-South Resources, Inc.: 2025 Regency Road - Suite 201 Lexington, KY 40503
Rome Oil & Gas, Inc: 2025 Regency Road - Suite 201 Lexington, KY 40503
Best Jets Engines, Inc.: 3743 Airport Drive Denison, TX 75020
Best Jets Airframe Services, Inc.: 3743 Airport Drive Denison, TX 75020
Best Jets Sales & Management, Inc.: 3743 Airport Drive Denison, TX 75020
Jet Makers, Inc.: 3743 Airport Drive Denison, TX 75020
Murphy Sand & Gravel, Inc.: 42435 Honey Island Swamp Road Pearl River, LA 70452
Great Lakes Pool Plastering, Inc.: 522 North Maple Rd Ann Arbor, MI 48103
http://www.annarborpools.com/temp48/Home.aspx?did=1328
Noble Jet, Inc.: Fort Lauderdale Executive Airport (FXE). (2/14/2007)
Southern Concrete Crushing, LLC.: 504 Water Street Madisonville, LA 70447 (6/6/2007)
Superior Avionics: Fort Lauderdale Executive Airport (FXE). (7/10/2007)
Jet Aviation Services, Inc.: Bob Hope Airport Burbank, CA. (7/11/2007)
Creston Aviation: Fort Lauderdale Executive Airport (FXE).
http://www.crestonaviation.com/ (8/13/2007)
Able Building Company, Inc. (9/25/2007)

Other Companies Either Owned or Related to Phoenix:

Best AeroNet, Inc.: 3743 Airport Drive Denison, TX 75020
http://www.bestjets.aero/
http://www.bestaero.com/
http://www.texomajet.com/
Bimini Island Air : Fort Lauderdale Executive Airport (FXE).
http://www.flybia.com/
True North Aviation: Fort Lauderdale Executive Airport (FXE).
Tchefuncte Harbour Townhomes.: Madisonville,LA 70433
http://tchefunctemarinatownhomes.com/index.htm
Great Lakes Pool Plastering, Inc.: 522 North Maple Rd Ann Arbor, MI 48103
http://www.annarborpools.com/temp48/Home.aspx?did=1328
Leisure Direct Inc.: 1070 Commerce Drive Perrysburg, OH 43551
http://www.leisuredirectinc.com/
Murphy Sand & Gravel, Inc.: 42435 Honey Island Swamp Road Pearl River, LA 70452
Rock Concrete, LLC.: 504 Water Street Madisonville, LA 70447
United Soils of Louisiana: 504 Water Street Madisonville, LA 70447
PBLS LLC.:] 504 Water Street Madisonville, LA 70447
Bayou State Holding Corp.: 2 North Bonita, Madisonville, LA 70447
Clifton James & Associates, Inc.: 504 Water Street Madisonville, LA 70447