American Water Star received a serious jolt of activity and price appreciation in today’s trading activity. The company was out with news pre – open that it was shipping water to FEMA for the emergency relief efforts for Katrina. In an earlier press release, AMW stated it was running as full capacity to ship water in it’s collapsable pouches to aid the relief effort.
As a result of today’s news, shareholders are being treated to much needed relief. The stock is trading at about the $.40 level, up about 60% from the levels it has been camped at for the entire summer.
I don’t have any information from the company, but the press releases bring up some interesting possibilities. According to press release 2, the company has orders to work round the clock. It does not specify if they are actually working round the clock right now.
Plants mentioned are: “Phoenix, Jacksonville, Magnolia and Kentwood. Estimated production capabilities are 125 truckloads of water per day, seven days per week. ”
The language is interesting. If they are indeed shipping 125 truckloads of water daily, it’s a substantial amount of revenue. Hawaiin Tropic was about $15,000 per truckload in revs. If water is 1/3 that, it translates to $625,000 per day in revenues, or $228 million in annual revenues.
In an early press release, AMW stated it was shipping as much water as it could in pouches. However, if memory serves, the pouch packaging business was to be spun out of the parent company, and if you weren’t a shareholder before about March of ’04, the revenues won’t flow to the company you own.
With no specific revenue numbers in the news releases, it’s tough to predict what this all means. The language is a little vague, but putting a pencil to 125 truckloads of water daily certainly puts a charge back in the possibility.
Because of the many past undelivered promises and anecdotal evidence of deep rooted problems, I am not prepared to say this stock is a buy. I need a lot more information and will make an effort to get it over the next couple of days.
For those who have given up on this company due to its past history, this dramatic surge in price and volume could be viewed as a selling opportunity. Perhaps a partial sale is in order. That way, you will have some money off the table, and still own the stock if this is the real turn around event. As more information comes, you can always buy it back if it is highly favorable.
This is at least giving me a small “ray of hope” for this stock. I will say I will remain very cautious until I see hard facts. Thanks for the new information.
Editor: My view exactly- I sold just over 10% of our holdings this past week, but am going to wait before selling anymore unless it gets much higher.
mr. editor are you going to sell off some shares?
Editor: As of last week, we still owned about 100,000 shares. After penciling some numbers from the a liberal interpretation of the press releases, I decided to hang on to the rest for now. Despite not being able to get a call back from the company, this is just the stroke of luck which could put this thing back on track. I believe I will hang in there and see what happens. However, I am a big risk taker by nature. If the September numbers aren’t huge in terms of growth, I will probably sell the rest and be done with it. In the meantime, if it gets much higher, I might sell a little more.
I’m a stockholder and would like to see anuy improvement in AMW Thanks.
Editor: The stock has nearly doubled in the last week. I would call that an improvement. Also, their press releases seem to suggest sales volumes are huge now. I will wait for the SEC filings to pass judgement on that issue.
what is the name and ticker symbol of the spin off company?
Editor: I have no idea, and it doesn’t seem to have happened yet.
I talked with 2 different people from Redwood consultants about the spinoff company. One of Redwoods consultants tells me they will be giving 1 share for every 10 share held as of March 2005. The other consultant tells me they will be giving 1 share for every 10 as of February 2004. Having 50,000 shares and it being my worst stock which I have held for over a year, the February 2004 date would disqualify me for any benefit. Do you know what the truth is in regard to the distribution and qualifying date? My 2 worst performing stocks have Redwood consultanting behind the company.
Editor: Since the Chairman doesn’t seem willing or perhaps doesn’t have the time to return my call, I can’t answer that specifically. If memory serves, I believe March of ’04 was indeed the cutoff date. I don’t know what the ratio is- probably 1 for 1. It doesn’t really matter until the spinoff actually occurs and you can see the capital structure.
My experience with Redwood has been somewhat different than yours. I have gotten a lot of great ideas from them, and a few bad ones. However, they were always truthfull about their view on the companies. They turned negative on AMW in about May or June of ’04. I took me through the summer before I realized just deeply their WalMart relationship had failed. Since then I have simply been cautioning people about waiting to see hard evidence of results. So far, they haven’t delivered any. Perhaps the recent order flow from Katirna will change the picture. We will have to wait to mid November to see September numbers.
Well, any movement of inventory and continued new shippments has to be a positive sign, regardless of past history. Unless there is an undisclosed mountain of debt hiding somewhere, I am considering purchasing more at this price point. Some DD and I will decide.
Editor: the September quarterly numbers will be interesting relative to the announcements. If you are going to be a buyer, now is the time as the stock has quieted down from the Katrina announcements.
I have never made any transactions over the internet, which company do you recomend? Thanjs
Editor: In a poll we did about 18 months ago, http://www.scottrade.com was the favorite amongst members. http://www.ameritrade.com was a close second.
I am a relatively new investor. Could someone tell me what the overall impact is of AMW being on the naked short list? Thanks
Editor: If you are referring to the Threshold List- I don’t believe there is any signficance to it. While Reg SHO is well intentioned, the enforcement is non existant and the problem still persists. Very disappointing to see this one fall back- calls into question the viability of any “rebirth” at the company.
Where is your BLOG on AMW from the Oct 6 damaging news about the financial disaster that’s occurred at this company?
Editor: After watching the stock drop over the last two weeks, I finally went to the SEC filings this morning and read about the defaults. I suspect the stock is getting clobbered because of the shares now available for sale. I’ll try to put one up later today.
Is this stock DEAD? I can’t find any info or contact numbers for AMWS. Do you have info? Did they file bankruptcy?
Editor: AMWS on the Pink Sheets- AMWS.PK on Yahoo! .002 quoted price. Just where it belongs. I don’t believe they are bankrupt, yet.Â