Platina Energy: Updates Revenues

PLTG delivered some news on Friday which really wasn’t monumental. I believe it was a bit of a reach out to investors just so they know the company is out there and still moving forward.

The company announced it generated more revenues in July than it did in the entire previous quarter.

So, is this a big deal? Top line, no. In Q2, PLTG only generated $50,000 in revenues. Therefore, what we can take from this is revenues for Q3 will at a minimum be triple the revenues in Q2, albeit still at a very small number.

However, the news is not without merit. Here’s what is happening. PLTG has now drilled 10 producing wells in Kentucky. 4 of them are generating revenues right now. Those should be ongoing, recurring revenues. A well might come out of service temporarily, but not for long.

Therefore, we are going to get huge percentage top line moves in the coming quarters, but it won’t be a big number.

Here’s what investors need to look for. As the company brings these wells online and proves out its reserves, the stock will eventually get valued based more on their assets or proven reserves, vs the top line revenue figure.

As you can see, the stock appears to have found a bottom it likes around this $.05 level.

If you didn’t sell it when it violated my published SSL of $.10, it’s probably not worth selling now. I characterize the stock as more of a hold, but you can accumulate at these levels if you are a long term investor. When they get a little further down the road and the market turns sane, this stock will likely return to a reasonable level.

Comments and Questions are welcome.

What Are Carbon Credits?

Today, just prior to the market’s open, China Energy Recovery made an annoucement which opens a whole new line of interest as it relates to their business- it also helps explain their 110% annual growth rate the last two years running, and headed that way this year.

CGYV announced the following about one of the 2005 installations- the Two Lions sulfuric acid plant- the largest sulfuric acid plant in China.

It seems Two Lions has such a perfect environmental footprint that it has been awarded Carbon Credits which will equate to more than $2.5 million in extra annual revenues.

So, this leads to the inevitable question- What the Heck is a Carbon Credit?

Carbon Credits were established in the Kyoto Accord- a world wide doctrine signed by 179 countries which sets standards for carbon emissions. Under the Accord, emerging nations are allowed a certain quantity of carbon emissions. The concept is designed to mitigate the climatic changes from global warming.

The United States, under the Bush Administration, has refused to sign the Kyoto Accord, a move that has angered many friendly nations around the world.

All other major nations, including all of Europe, has signed the Kyoto Accord and adheres to its standards.

Under the Accord, emerging nations are allowed a limited carbon footprint. Within their respective countries, there may be industries that generate a positive carbon footprint, and others with a negative carbon foot print.

The industries with a negative carbon footprint must buy carbon credits through an exchange to equate to zero carbon. Manufacturers with a strong carbon signature can generate carbon credits that can be sold for cash.

According to the release, Two Lions is so fuel efficient it is generating carbon credits that will yield more than $2.5 million in cash payments annually. Moreover, as a result of the CGYV installation, Two Lions is burning 120,000 less tons of coal than it would without CGYV’s technology. That’s a lot of smoke in the air.

These carbon credits add a whole new dimension to the attractiveness of their technology. It’s another way for the installer to get a return on investment.

Yesterday was a very interesting day for the stock. I cautioned investors in an early BLOG the stock was trading poorly, and it might pay to wait for stabilization if you wanted to pick up some shares.

The stock was pretty much in a free fall yesterday until about mid day. This is an hourly chart from yesterday- each bar represents one hour of trading. Note the big down bars in the early sell off, associated with high volume.

At the end of the day, the stock turns rather abruptly up to finish much better on a nice volume surge.

As I suggested in yesterday’s BLOG, I suspect a couple of the funds who invested in the stock are dumping rather aggressively for reasons unrelated to the company. That’s just an educated guess.

They may have simply run out of supply, as the stock has traded pretty darn good volume for the past two weeks.

I’m not prepared to trust it yet. It will be interesting to see how it opens today and trades throughout the remainder of the session. I’d really like to see a couple of quiet days with very little pressure on the stock to be convinced the excess supplies have been absorbed.

For more information on Carbon Credits, Click Here. To read today’s press release, Click Here.
Comments and questions are welcome.

NIHK News Encouraging

Nighthawk was out with some reassuring news pre open today, and I am starting to become more optimistic on the situation.

CEO Doug Saathoff was very quiet over the course of the summer, but of late has started communicating with shareholders again.

Today, he was out with commentary stating their legacy business would hit a new all time high this year and order flow was reasonably robust.

In a letter to shareholders, he stated he would update everyone on the status relative to the set top boxes in the near future.

It’s quite refreshing to see the company open up a little after all these months of silence.

I’m now pretty comfortable in assuming their business has not eroded much in the teeth of this recession, and a little positive news on the set top boxes might just get the stock rolling again.

I’m looking forward to his commentary on the set top box business.

Meanwhile, as you can see from the chart, the stock remains embroiled in a dismal malaise. I don’t expect this microcap stock to start trading as well as their larger cap bretheren in the short term. It’s going to take a bit of time to see retain investors back in the market buyind small stocks.

Eventually, volume and liquidity will come back, and some of these kinds of stocks will start performing quite a bit better.

NIHK might be a good candidate for a rebound later in 2008 and into 2009.

I’m looking forward to further updates from the company.

China Energy Appears Vulnerable- Caution Suggested

CGYV is trading rather poorly despite some pretty awesome numbers.

There were 7 million shares that became free trading as a result of the recent registration statement.

The majority of those shares were priced at $2.18 in the $8.5 million financing.

I made the mistake of assuming the majority of those shareholders would look at the numbers and be patient enough to look for much higher levels.

As it stands today, I was wrong. A lot of these funds are under quite severe pressure today to raise cash at any cost, and clearly CGYV has been vicitimized by a little short sighted pressure.

I believe there might be as much as 1 million shares for sale out of the 7 million that were registered.

In light of the continued pressure, I would guess the stock might trade as low as $2.10 to $2.20.

Therefore, I you are considering a purchase as the stock gets cheaper, I would consider waiting until it is clear the supply is exhausted.

If you are concerned about the reversal in the stock and the pressure, sell it and get out.

I would set the SSL at $2.

China Energy- They’re Starting To Talk

CGYV behaved pretty well today on the volume side. I would like to have seen a little appreciation on the price, but it’s a sign of the times.

If you have capital, and you have bought into this company, you are not a seller of this stock. If you are forced to sell because of your circumstances, or are focused solely on the market, you could be a seller.

If you are a seller, I suspect your timing might be bad, as the majority of the damage has been done out there in the stock market. Real revenues, real profits, and really valuable energy saving technology in a world where that technology is very valuable will eventually take this stock where it deserves to go.

There’s a couple of interesting items worth pointing out. For starters- this morning’s news release. The company announced a new contract for engineering services- admittedly very small by their standards, yet important for another reason. Note who is handling the services- MECS.

MECS is relatively meaningless to the average guy, but the name Monsanto (NYSE: MON) is not. MECS is formerly Monsanto Enviro-Chem Systems, and one of the largest designer and builders of manufacturing facilities in the world. It was formed in 1969, and was purchased in a management led buy out in 2005 from parent Monsanto. If you look at their office locations, they are a world wide firm. Click here to visit their web site.

CGYV is deeply entrenched with MECS, and obtains a high percentage of its business from the aformentioned world wide firm.

Here’s a second item for you to chew on. There was an interview published at CleanTech.com with Roger Ballantine, the most recent board member added to the CGYV management team, and one of the most respected names in the alternative energy movement.

Mr. Ballentine is a frequent lecturer at Harvard, and served under President Clinton as Chairman of the White House Climate Change Task Force and as Deputy Assistant to the President for Environmental Initiatives. The Clinton Climate Change Task force was the birthplace of Al Gore’s environmental movement, and led to the making of the movie An Inconvenient Truth. In the Alternative Energy field, this guy is the real deal, and highly respected world wide.

If you would like to read the interview with Roger Ballantine, simply click here.

Today’s action in the stock was pretty interesting. Here’s a chart:

There was a nice volume surge with no associated price appreciation. This means sellers were matching buyers 1 for 1.

This stock has now traded 1,018,198 shares since the company’s registration statement of 7 million shares went effective. The financing was done at $2.20- so $2.75 isn’t a really exciting profit- unless you think the world is coming to an end of course.

I suspect the number of shares for sale is probably in the range of 10% to 20% of those in the reg statement. Most of the players have very deep pockets and a long term perspective, but there are always going to be a few weak sisters.

If you average it out, and assume it’s 15% (just a guess), about 1 million shares of buying would clean this stock up and position it to move higher.

Assuming the volume is all double printed, which is a worst case scenario, this would mean the market has chewed up about 1/2 the existing supply.

So, here’s the point- keep an eye on the volume. If it holds up over 100k shares everyday this week, a break out is inevitable. If the volume slows down, the stock is likely to go into a slight pullback- probably pretty shallow.

I’m told there’s starting to be some chatter on this company around the internet. My hope is that investors look at the facts around the company, not the past. The past is over. It’s been a bear market, and the US is in a recession. There is no recession in China. Perhaps a slow down worst case.

I picked up another 5,000 shares for my own account today- I believe I’m going to make a fortune on the stock.

If you have any questions on the company’s numbers or technology, post them here. Comments and questions of an intelligent nature are always welcome. If you don’t like the company, go ahead and tell us why, and I’ll publish your comment with a response.

eFood- Rumors Of Their Death Have Been Greatly Exaggerated

eFood’s quarterly numbers came out yesterday, and I had a chance to review the 10Q filing this morning.

The company didn’t mention the revenue number in its press release, which I believe was simply absurd. Instead, it focused on the achievement of generating $5,400 in cash flow profits- which is certainly a step in the right direction.

Here’s how they arrive at that number- they take the loss of $500k, subtract off the loss the $505k in non cash expenses they booked, and come up with $5.4k more in cash than when they started the quarter.

Here’s what they didn’t bother to cover in the press release- revenues- revenues went from $321k this quarter in ’07 to $292k this quarter in ’08- a 10% drop in revenues.

So, where do all these non cash expenses come from, and how do they pay for them? Here’s where I was very pleasantly surprised-consulting expenses $552k- based on history, one would expect the company was handing out many millions of shares to whomever they pay to generate that expense. Not the case.

In fact, the number of shares I&O was 193 million- the shares I&O at the end of the last quarter- 192 million shares. This represents about .005% dliution- one half of one percent.

Therefore, over the past 3 months there was nearly zero dillution- that’s the first time this has happened in many quarters.

At the end of the quarter, the company still had about $1.76 million in cash and cash equivalents. Pretty darn good in light of the revenue number.

I must admit, I was very pleasantly surprised to see the number of shares I&O remain static. This bodes very well for the possibility of price appreciation when buyers come back to the market. They must have a big expense related to shares issuance that they are amortizing over a longer period of time.

From here on the big issue is revenues- can they drive increasing revenues from either their DR campaign, which has been revamped- or the wild card of PurEffect finally going to market in a major way?

I know many of you like to see a chart- and here it is:

Here’s a look at the last year of price performance. As you can see, it’s a mess, and trading at new all time lows.

For those of you who have chosen to hang in there, the company is still around, and still has a shot at getting that top line moving. They simply have to execute.

Just to clarify- I am not suggesting you need to buy the stock today. If you are still holding the stock, you are far from dead. The company is managing its cash very well. I would suggest buying the stock when that top line gets moving to the upside.
Stay tuned for more in this adventure.

Comments and questions are welcome.

China Energy Open Favorable

The turmoil on Wall Street with the LEHMAN bankruptcy and the AIG fiasco has the markets reeling this morning and stocks selling off.

In my view, this is fantastic news CGYV has provided a very favorable entry level for those who have an interest. The entry level is very favorable today. I would stay disciplined, but if you like China Energy, now is the time.