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People Trees
 People Trees and the People Tree Hop Explained
    Publisher: Kaiser Research Online

 

What is a People Tree?

Before you resort to this explanation about how the People Tree system works, we strongly recommend that you first try to use the People Tree System and see if you can intuitively get the hang of it. Most industry people who are heavily networked almost always figure it out instantly. Your average speculator who may know only a few big industry names might not see the connections pop as quickly, but with a bit of practice you too can start to see who is who in this small world of junior resource sector venture capital. To get you started we recommend initiating the People Tree Hop with the flagship company of a well-known brand name: Ross Beaty's Pan American Silver Corp. The examples below were clipped from a People Tree generated on February 1, 2012.

A People Tree is a way to see how a group of companies are related to each other through their respective insiders, the "people" responsible for the success or failure of the company. A People Tree contains basic information about a company such as capitalization, working capital, a very brief synopsis of the company's focus, a chart, and a list of related parties.

Example People Tree for Pan American Silver Corp (PAA-T) - the "trunk"

Pan American Silver Corp (PAA-T)People Tree Available
Profile Search Web Site Forum SEDAR Quote
Issued
106,937,220
Diluted
115,727,700
Working Capital
$625,726,000
As of
9/30/2011
Synopsis: Pan American Silver, led by Chairman Ross Beatty and CEO Geoffrey A. Burns, operates seven silver and polymetallic mines in Mexico, Peru and Bolivia and has over 400 million ounces of silver resources in all categories. In 2007 Pan American produced 17 million silver ounces at total costs per ounce of $5.69, and in 2008 18.6 million ounces of silver. In 2009 annual silver output increased to 23 million ounces, climbing again to 24.2 million ounces in 2010. The company has forecast that 2011 production will decline slightly, to 23.5 million ounces, with expected net cash costs of $7.25 per ounce of silver. On the development front the company has two significant advanced deposits, the Navidad project in Argentina where a preliminary estimate in 2011 forecast a 15 year mine life with annual silver production of 19.8 million ounces over the first five years and where a feasibility study is expected in late 2011, and the La Preciosa joint venture with Orko Silver where Pan Am is completing a preliminary assessment during the first half of 2011.
Related Party Occupation Related
Since
Insider Director Officer Capacity Ownership %
Ross J. Beaty Geologist 9/30/1998 Chairman 1,818,680 1.7%
Michael J. J. Maloney Investor 9/11/1995

62,412 0.1%
Geoffrey A. Burns
7/1/2003 CEO & President 37,257 0.0%
Robert Pirooz Lawyer 4/30/2007
Corporate Secretary 6,521 0.0%
Walter T. Segsworth Engineer 5/12/2009

2,150 0.0%
David Press Engineer 5/13/2008

1,497 0.0%
Michael Carroll
11/10/2010

1,000 0.0%
Christopher Noel Dunn
12/31/2011

0 0.0%
Royce & Associates LLC




8,468,728 7.9%

The above is a snapshot of information available with the KRO Profile for Pan American, which I can access through the "Select Company Profiles" drop-down menu near the top right corner of every KRO web site page. What makes it a "Tree"?

At the top of every People Tree is a profile snapshot of the primary company, the "trunk" one might say. The related parties are listed in the order of highest to lowest stock ownership. All the related party rows in the trunk snapshot have a green background. Below the primary company snapshot you will find a series of additional similar company snapshots. Every related party in the subsequent companies who is also an insider of the primary company has its row colored green. By scanning for the "green" insiders you can see who is related to the trunk company.

Two "branches" of the People Tree for Pan American Silver Corp (PAA-T)

Alterra Power Corp (AXY-T)People Tree Available
Profile Search Web Site Forum SEDAR Quote
Issued
465,116,280
Diluted
478,786,913
Working Capital
$3,881,000
As of
9/30/2011
Synopsis: Alterra Power Corp is a Ross Beatty company focused on the geothermal sector, previously known as Magma Energy. The company went public by IPO on July 7, 2009, placing 66 million shares at $1.50 for proceeds of $100 million. On July 23, 2009 Magma announced the acquisition of an 8.62% interest in HS Orka, a large producing geothermal company in Iceland, with installed geothermal power capacity is 175 megawatts from the Svartsengi and Reykjanes power plants. The transaction will increase Magma's direct and indirect installed gross geothermal power production to 26 megawatts immediately and up to 91 megawatts after HS Orka's planned expansions and Magma's current 12-megawatt expansion at its existing Soda Lake operation in Nevada. On September 1 Magma announced a second transaction, to acquire an additional 32% of HS Orka which would bring Magma's total interest to 43.1% with an option for an additonal 5.0%. Subsequent transactions in mid 2010 saw Magma increase its HS Orka stake to 84%. In March 2011 the company announced it would be merging with Plutonic Power, with each Plutonic share being exchanged for 2.38 Magma share, with the resulting company to be called Alterra Power Corp.
Related Party Occupation Related
Since
Insider Director Officer Capacity Ownership %
Ross J. Beaty Geologist 1/22/2008 Chairman 121,579,861 26.1%
Walter T. Segsworth Engineer 4/28/2011

2,573,970 0.6%
Michael D. McInnis Geologist 4/28/2011

3,344,199 0.7%
Paul B. Sweeney Businessman 9/11/2008

1,291,150 0.3%
Donald Shumka
1/22/2008

560,000 0.1%
David Cornhill
12/1/2008

283,214 0.1%
David O'Brien Retired 4/28/2011

0 0.0%
John Caron
9/1/2011
CEO 0 0.0%
Catherine J. Hickson Geologist

VP Exploration 0 0.0%
Francis C. Monastero
3/17/2008

Advisory Board 0 0.0%
Monte Morrison Engineer 6/21/2010
VP Operations 0 0.0%
Bruce Ripley


COO 0 0.0%
Alison Thompson Engineer 9/8/2009

VP 0 0.0%
Andrea Zaradic Engineer 11/3/2008
VP Corp Dev 0 0.0%
Anfield Nickel Corp (ANF-V)People Tree Available
Profile Search Web Site Forum SEDAR Quote
Issued
37,966,966
Diluted
40,061,966
Working Capital
$7,087,531
As of
9/30/2011
Synopsis: Anfield Nickel Corp is a former CPC created by Aazi Shariff that went public on Oct 28, 2005, completed its qualifying transaction on November 5, 2007 by optioning a Yukon gold project on which it did little work, and in April 2009 became Ross Beaty's nickel bottom-fishing vehicle. Anfield accomplished this by purchasing the Mayaniquel nickel project in Guatemala from BHP Billiton doe US $2.5 million, which was paid for by a $3.6 million private placement taken down at $0.35 by Ross Beaty. Mayaniquel is a magnesium rich nickel laterite deposit of 28,230,000 tonnes of 1.5% nickel which another junior called Jaguar Nickel had tried to develop using a new process and sold to BHP when the process proved sub-economic. This project is the subject of a Guatemalan government allegation that the prior owner did not complete a required EIS. Anfield has filed for a judicial review which could take 2-5 years to be heard, during which Anfield can hold Mayaniquel as inventory in anticipation of better nickel prices.
Related Party Occupation Related
Since
Insider Director Officer Capacity Ownership %
Robert Pirooz Lawyer 4/7/2009

46,700 0.1%
Ross J. Beaty Geologist 5/14/2009


0 0.0%
Aziz Shariff
5/13/2005

4,460,000 11.7%
David Strang
11/5/2007 Chairman 580,000 1.5%
Anish Sunderji
5/13/2005

150,000 0.4%
Marshall Koval Geologist 4/7/2009 CEO & President 102,500 0.3%
Lyle Braaten
5/26/2011

0 0.0%
Donald Shumka
12/16/2010

0 0.0%
Lumina Capital LP Private Company 5/14/2009

Placee 10,150,000 26.7%
Sue Ann Ching
8/26/2005


900,000 2.4%
Rahim Ladhani
8/26/2005


900,000 2.4%
Raheel Sayani
8/26/2005


900,000 2.4%
Safer Shariff
8/26/2005


900,000 2.4%
Roshan Virani
8/26/2005


900,000 2.4%
Richard Bullock
8/26/2005


400,000 1.1%
Andrew Carstensen Geologist 8/19/2009
VP Exploration 10,000 0.0%
Sandra M. Lim Accountant 8/19/2009
CFO 0 0.0%

The "branch" companies below the "trunk" company seem to be in random order. Is their any order to the sequence?

The order of the companies is the degree of overlap between the insiders of the "trunk" and the "branch" companies. For example, if there are branch companies with 4 insiders who are also insiders of the "trunk" company, these will be featured first in alphabetical order. Then come the "branch" companies with 3 overlapping insiders, then 2 overlapping insiders and finally those with only 1 overlapping insiders.

If the insiders are listed in the order of the amount of stock they own, why are there insiders with zero stock at the top of the branch company lists?

The branch company insiders who are related to the trunk are colored green and are always at the top of the list. These related insiders are listed in the order of the amount of stock they own in the branch company.

There is too much information on the People Tree. How do I get any value out of it?

You should focus on the stock charts which give you a very quick idea how the group is doing. The charts include dollar signs whose width and height represent a financing size range. The working capital figure tells you how much money the company had left as of the last financials. The real key, however, is to discern who the movers and shakers are in the group.

How do I differentiate the movers from the tagalongs?

This is an intuitive process helped out by the information in the "capacity" and "ownership" columns. If the insider is a "President" or "CEO" and owns a large position in the company, he or she is generally the mover and shaker. Generally the cluster of chairman, president/CEO and chief financial officer (CFO) represent the core people behind the company.

Lawyers and corporate secretaries seem to be related to a lot of companies. Is this significant?

When the "occupation" is listed as "lawyer" or the officer capacity as "corporate secretary", such people are not usually the important decision-makers or influence wielders. It takes some experience studying the People Trees to become good at recognizing the important networks.

What is the People Tree Hop?

Each branch company snapshot has a link to its own people tree. If you click on it you will get a People Tree with that company as the trunk. This is the way to find out what other people in the branch companies are related to. If you notice Ross Beaty is an insider of a branch company, clicking on that branch company's people tree will turn the branch company into a trunk company below which are all the branch companies whose insiders overlap with the trunk company. You will find every additional company of which Ross Beaty is an insider featured as a branch company.

Why can't I just search on Ross Beaty?

KRO is not set up in the style of Stockwatch's "Participants" system which allows you to search on individuals. But once you observe an individual within a People Tree, by doing the People Tree Hop you can find out everything he or she is an insider of.

I notice that in the People section of a KRO Profile the related party list includes non-insiders such as brokers who bought private placement stock who do not show up in the People Tree. Why is that so?

If you think the people trees look busy as they are, adding these heavily networked non-insiders would generate so many branch companies you would never spot the forest.

What do you mean, spot the forest?

The "forest" is the network of individuals who organize, finance and promote public companies. Sometimes these networks have a prominent figurehead, but often they are a collective. By studying the condition of the companies that form the forest, you can develop a good sense of whether the network is flourishing or wilting. By limiting the trees to insiders we keep down the noise.

What happens to former insiders?

We do not "Tree" individuals who have ceased to be insiders. However, when a company is delisted as a result of takeover bid, we freeze all the insiders present at the time of the takeover. The branches that show in in Tree which have "red stock charts" are companies that no longer exist. This is the best way to term the track record of insiders.

How do the People Trees help me find good bottom-fish or spec value hunter picks?

Every network has a stable of companies at various life cycle stages. The People Trees allow you to start with the strong companies which are at the peak of their speculation cycles, and discover other related companies which have not yet received the spotlight, and are perhaps being groomed for a speculation cycle driven by the network. After all, the bottom-fishing strategy is all about finding juniors while they are unloved or obscure. Doing the People Tree Hop is like embarking on a treasure hunt. For example, careful study of the complete Ross Beaty People Tree will reveal that Robert Pirooz and Aziz Shariff are often present. Sometimes these individuals are present as insiders in a company that does not feature Ross Beaty as an insider. They may be signposts of Ross Beaty's eventual arrival, as turned out to be the case with Anfield, a shell that became Beaty's nickel bottom-fishing vehicle in 2009. By clicking on the "available people tree" link for a branch company that features Aziz Shariff, you will get a new People Tree that includes all companies in which Shariff is an insider. Some of these may be an obscure company with a bunch of apparent "nobodies" as insiders. Such a company might one day see the arrival of Ross Beaty as an insider, after which the stock will no longer be cheap.

Why does KRO "profile" over 1,800 companies?

Kaiser Research Online is both an information portal designed to allow members to do their own research, and a commentary service which provides recommendations for members who prefer to read the ideas of other experts. Since you can never tell from where the next hot junior will emerge, we have taken a "total universe" approach where we compile data on all the TSX and TSXV resource companies, with a few ASX and US listings included. This allows us to deploy algorithms which monitor for changes that signal something is "up" (or "down" as the case may be) so that KRO staff can investigate. These algorithms are not available to KRO members, but certain derivative features are available. For example, the Index Out and Under Performers Research Tool presents companies which have undergone percentage gains or losses greater than that achieved by the KRO Index in which we have classified the company. This a subtle way to detect price trends above and beyond what the group is doing response to, for example, gold being up or down. More importantly, our coverage of the total universe allows us to use the KRO Search Engine to filter for companies that meet very complex criteria sets. If you have a model of what a perfect buy relative to a macro outlook you feel strongly about, you can construct a search which produces a list of companies on which you can do more detailed research via the KRO Profile and links to external resources such as the company's web site, SEDAR or even a stock forum. The People Tree link is always available in the results, and because management is key to the success potential of a company, clicking on the People Tree is the fastest way to eliminate the duds.

I've become addicted to doing the People Tree Hop and spend hours on it. Is there a cure?

Once you get the hang of it, and start using the links to the Stockhouse forums, company web sites, and SEDAR filings to do detailed research, it is admittedly tough to stop. We know, because we are heavy users of the People Tree Hop. The People Tree Hop launches you on a random path of discovery, creating insights as patterns emerge. These insights can then form the basis of specific searches designed to unearth all instances of the pattern that seems to be important. KRO is designed to be addictive.

Where can I access a People Tree?

Anytime you see the image in association with the company name such as in the company header of search results, it is a link to that company's People Tree.

 
 

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