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I Don't Totally Get It: MMED Update

I once heard someone describe an under followed company as an "Enigma Wrapped in a Mystery". The name of this one on its own is a little weird- Midas Medici- what the heck does that mean?

We all know Midas was the ancient Greek God who had the ability to turn anything to gold. With today's gold prices, that really means something.

The Medici thing is a bit more of an Enigma. If you do a little research, you will find the Medicis were the wealthiest family in 13th Century Italy.

Cosimo de Medici, the guy you see pictured here, was the biggest wealth creator of the bunch- The family pretty much ruled Florence, which was the cultural capital of Europe, and the Medici family was well known in banking, trade, and industry, and as big supporters of the arts as well.

So- the way I figure it- someone had a good sense of humor when they chose this name. It doesn't make any sense as a name for a business that flourishes in the IT/Energy saving business, but it you're looking for a metaphor for making money, the name jumps off the page.

Midas Medici (MMED) is the public company that, until recently, didn't even know it was a public company. They are starting to know, and with this valuation and these numbers, stock buyers are going to start finding out about this one before too long.

You just gotta have a little faith these numbers are going to attract an audience, and it's starting to happen.

This was the company I wrote about back on May 11th. The stock had never traded, and despite numerous bids, not one single share traded. No one wanted to sell a single share to any bidders. It's improved since then- but not much. It's still going to be tough to accumulate, but likely worth the effort.

Seen Your Electrical Bill Lately?

Have you seen it lately? Out here in California my bills have skyrocketed over the last 3 years as demand for electricity is on the increase.

One of the driving forces for increasing electrical demand is the rapidly increasing use of digital technologies. We've gone from a world where we all rode our bikes everywhere to a world where each of us in consuming a substantial amount of electricity every moment. Just take your cell phone for example. Every one of us carries a cell phone, and it's consuming electricity all the time. When I grew up, no one had cells phones- we just had bikes and friends we had to talk to face to face.

Mammoth data centers that are springing up everywhere to handle all this electrical traffic are gobbling up buckets of energy.

Want to quantify the numbers? Equinix (EQIX) estimates the electrical demands from the world's data centers will grow 44 fold from now until 2020. Consumption will grow from .8 Zettabytes to 35 Zettabytes over the next 9 years.

Now, I don't know exactly what a "Zettabyte" is, but it sounds like a whole bunch of power considering the world's existing data centers are now consuming less than 1 of these bad boys, and there's lots of data centers around. 

Recent Developments

There have been 3 relatively significant developments for MMED of late.

First and foremost, the stock has begun to trade a few shares in the $2.50 range. This might mean individual investors can start accumulating the stock- you have to put an order out there to find out.

Secondly, the company completed another acquisition late last week- they bought a web portal focused on a community of hedge funds and investors in the energy and commodity sectors.

Third, the first formal research report on the company was published late last week, and the author places a price forecast of $7.65 over the next 12 months.

If he's right, his forecast represents a 190% gain over the last reported trade in the stock.

The report covers several core issues important to this idea. The growth of Cloud Computing and Data Centers is driving the need for "Green" it solutions.

MMED sports over 700 customers, many on recurring revenue type contracts. It all adds up to over $50 million in annual revenues.

And, as the report points out, there are only 8.7 million shares fully diluted. This means, at about $2.50, the market is only giving this company a total value of $22 million, which is absurd when held up against their over $50 million in annual revenues.

Here's a couple of references:

• Click Here to read about last week's acquisition
• Click Here to read the Muryphy Analytics research report

As of Friday's close, this is still a very thinly traded stock, so caution must be used to acquire it properly.

The stock closed with a bid of $2.02, and an offer of $2.60- there's only 500 shares offered at $2.60, so it wouldn't take much market order buying to send this thing straight up.

I'm going to offer the same advice I offered in the past. File a limit order to accumulate one of the best values I've seen in a long time.

This idea is one of the few that offers the upside of a penny stock with the real numbers of a value stock. It's an ideal idea for you if you like value with upside and have the patience of a month or two.

Everything I write about eventually trades big volume. Sometimes they go up beautifully, sometimes not. When this one starts to trade some volume they'll be no holding it down- the shares just don't exists.

The company doesn't know it's public company. Those who own it when MMED realize it is a public company will be in position to make a lot of money.

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