US Energy- a mess nearly cleaned up, or still a nuclear waste dump that is still radioactive? That is the question many of you are asking in light of the stock’s recent attempts to behave better.
I am not convinced this stock is ready to begin a true rebound phase. While recent information flow out of the company seems very promising, it would appear the stock is not quite ready to take off like a sprinter.
USEI is in debt to the tune of about $2 million. According to recent SEC filings, the company is probably paying somewhere in the neighborhood of $150,000 per month in interest and principal.
I believe the company has the option to pay in cash or stock. If you look at the trailing financial statements, you can easily conclude there is no way the company has enough gross profits from sales to make the monthly payments in cash- yet. The way they are growing, that day will come.
I would guess USEI is issuing somewhere in the neighborhood of 2 million shares monthly to satisfy its debt obligation. If the stock trades 1 million shares per day, it’s a manageable number. The recent volume increases will go a long ways towards keeping the debt under control.
There is also the issue of massive supplies from early investors and those with a very low cost basis- that supply could be lurking.
The chart is definitely improving nicely:
Here’s my standard 61.8% retracement chart. As you can see, the ideal level to jump in is $.096.
If you feel compelled by the story, and want to particpate while it continues to struggle, a position at $.095 would probably be relatively low risk in the short run.
However, I don’t believe the stock is ready for an EFSF type explosion. Numbers appear to be improving. I would like to see Q4 and Q1 ’07 results to see if the trend is continuing.
Longer term- the holy grail for this one is the 10,000 bus contract in Thailand. As soon as that gets rolling, so will the stock. According to the company’s press releases, they are in a pilot program now. When this program is generating big revenues they will be able to pay the cost of their debt in cash, and limit the massive supply of stock. I would guess this company will be at 200 million I&O in pretty short order.
Comments and questions are welcome.
wow.. 200K shares traded…what do you make of it? Could it be the stock is in a ‘wait and see’ mode for the Thailand news?
Technically, it looks ok – possible pennant formation in the works?
aside from the fundamental side and waiting for relevant revenue news, what do you make of technical side of this stock?
thanks in advance
Editor: Technically, it doesn’t look to me like this stock is ready to break out yet. There is more supply for the market to deal with. A few real fundamental developments would probably help.
any idea when the earnings will be announced? any week now i think if their last one was mid november 06…
should be great qtr from revenue stand point.. but would be nice to get to profitability soon or have a visibility to reach profitability…
Editor: If history repeats itself, this company will take until the last moment possible on the regulatory side to deliver numbers. Because it is the year end and the company has to get its audit done and file its 10k, I expect it to be the end of March, or even a week later if they file for an extension.
http://www.forbes.com/free_forbes/2007/0226/078.html?partner=yahoomag
article from Forbes on the alternative energy sector… mentions USEI but not much substance one way or the other… not thrilled being associated with other worthless companies though.. your thoughts? wonder if this would much impact on the stock movement….hope not.
Editor: Apparently not. Interesting, but not much to go on. Forget the Forbes yellow journalism- it any industry in its infancy you are going to be able to find tons of exaggeration. USEI is either going to sell the previously announced conversions in Thailand, or it’s not. If it does, you should do very well in the stock. Would have been nice to see Forbes mention the Thailand bus conversion contract.
i like the look of this but right now stock seems to be drifting south…
question: as you state above, if i could get in soon at 94-5cent mark would it still be a good idea… or should i add to my good ol’ CPNE stake instead?
one good PR could turn this northward big time.. would hate to miss it…
thx for your opinion in advance….
Editor: Are those the only two choices? I believe USEI is starting to get to be a buy when it’s cheap and no one wants it. I don’t believe the surges are ready to lead to a breakout yet, but someday. If it were my capital, I would look at TTGL right now. It’s quiet, no one is really following it, and their current quarter could be a huge bottom line turn. In the meantime, you are paying about $60 million for a company that could deliver $130 in the current fiscal year. That having been said, I believe CPNE could have a long way to go yet as well.
I own 30,000 of USEI for an average cost of .274. My loss to date is $5,622. Forbes Feb 26,2007 issue has an article that I read today that crushed me and you should read it too on page 80. It appears to me that we’ve been had by some real scam artists. Since the stock is rising slightly, I’m wondering what the incentive is. This is one that we should never have been in.
Editor: I hate to say this, but you simply should have sold it when I dropped it due to complete failure. Since I haven’t seen the article and have no idea what it said, I can’t comment. They are trying to refinance and buy Khalihari. If they pull it off they have a chance of survival, but I believe the old shareholders have little or no chance.
I think it is important that followers of otc journal read the letter usei is sending to forbes magazine dated 2-14-2007 at their web site. http://www.usenergyic.com It is a very strong letter and shows a management team very proud of their work over the last 3 1/2
- 4 years. To say that they were upset about the recent forbes article would be an understatement. thank you
Editor: Everyone is always upset over negative publicity. Here’s a simple solution. Start delivering sales and stop financing with toxic sources, and all your problems go away.
Please explain your response to Mr. Cisar about USEI that “old shareholders have little or no chance” – do you mean they are destined to lose their entire investment regardless of the outcome of the refinancing efforts? Just tell it like it is – is Mr. Cisar correct in saying that “we’ve been had by some real scam artists?” We’ve all been frustrated by this company’s stock performance, but if they aren’t doomed to failure as is surmised, just maybe one day we’ll wake up and see this company trading for what it is really worth, whatever that is.
Editor: I stand corrected- I was thinking about an older idea- HESG- I believe USEI shareholders do have a pretty good chance, but I don’t see the commitment I would like for the management team.
Did I not told everyone that was another STLOF, was I right or wrong, but you call me down and treated me like dirt, I am sure your not going to post that piece of truth.
Editor: You are simply a whiner. Apparently, you haven’t been watching EFSF, PNWIF, CPNE, or TTGL. It was a loser. There are winners. Stop whining about an event 6 years ago. This is no place for you. Stick with large caps.
Have you heard anything about USEI field trial in Thailand? Their old press release (Jan 16) states: “We are now scheduled to install our system in the field during January directly with our client in Thailand. We anticipate a two to four week field trial followed by the deployment of our technology …”
They should have been done by now. Normally I would interpret this as very negative, but considering that the management (as you stated before) do not have a clue about market communication – who knows? Currently it seems this stock is just drifting downwards and it would really need a push upwards, and some good news about the Thailand contract might help. On the other hand I think the stock is much undervalued at this point, so it could make a giant leap if we see some good news.
Editor: The management hasn’t warmed up to my commentary on the stock, so they don’t stay in touch with me anymore. I would love to see this company deliver something positive- but who knows.
Today’s press release bumped the stock up to 9 cents (from 7) with over a million shares sold. In the release it was stated that “Major news was coming on Thursday”. Care to speculate at all??
Editor: Here’s the key with this one. It doesn’t matter what the press release says. What matters is that the stock goes up when it trades volume. If it can’t even get through $.10, you have absolutely nothing here. When it starts going up on volume, it will be a whole new ball game.
Editor, are you still in contact with management? It’s frustrating because they don’t seem to answer my emails. I believe very strongly in this company, and have to think that they are just not in the mood to think about anything but driving sales and building the business. Though it tends to piss you off when you are ignored. In the long run, this stock has to come back. How many shares are you still holding?
Editor: No- I gave up on talking to them because the CEO was simply a difficult guy. Did you see yesterday’s press release? He is gone. Looks like they gave him his walking papers.
I didn’t see that press release about the CEO getting fired (I tend to follow these thing on Yahoo Finance and it’s not there). Do you see this is as a positive for the company? I’m also a big believer in the company (I confess I’m in a little too deep with it already, wish I had followed you with Nighthawk and eFoodSafety, yes I know there will be others). I hope you can have good relations with the new guy. Thanks for continuing to do a great job with the nesletter.
Editor: It is buried further down in the last press release. We’ll see if the new CEO wants to talk. As far as which stocks to be in- just follow the SSLs- it was $.12 for USEI- if you had just sold it and moved on when it traded so poorly, we could have a whole new ballgame here.
How many shares are you still holding, can you answer please, thanks.
Editor: The shares we hold are restricted until June I believe, so we still have them all. You can find this information at the section for each company and the disclosure section on the web site. We update it every Monday.
Editor, what does it mean when a company puts out a piece of very positive news and the stocks continues to drop? I’m not giving in on USEI, the potential for profit is so great, one day this WILL turn around. thanks in advance,
dave
Editor: It means there is still massive excess supply out there on this stock. I can’t quite figure out what these guys have done to create this supply, but it is absurd. Until the supply dries up, this will continue to be technically problematic for the stock price, which is different than the company.
Dear Editor, sorry for all the questions on USEI. I’ve only been trading for about 2 years now, and still trying to make sense of it all. I look at Yahoo finance most of the time for info, they put the “float” shares of USEI at about 78M, though the outstanding shares are more like 132M, assuming that about half are held by management, hence the 78M, isn’t the massive supply coming from the float? and if so, is this not more of a low volume issue than a supply issue? In other words we just need more interest in this stock, and it’ll move. again, many thanks for all the answers,
dave
Editor: That’s the big question- if there were more volume, would it move again? I don’t know. There has been lots of volume in the past, and all it did was move down. If it starts going up when there is volume, I would cover it again under the right circumstances. Love their business, but somebody really screwed up on the capital structure on this one.
Hi. I waswondering why the stock symbol has changed from USEI to USEIE. I own another otc stock and it symbol has changed like this (adding an E at the end) a couple of times and then changes back in a few days or so. I find this rather a problem in that I have to change my watch lists and protfolios and then change them back. I was wondering if you knew why this happens?
Thanks! Also any idea on when they will release the report for 2006. The last message was on or about April 15 but now it is April 20? Thanks again.
Editor: If it has an “E” on the end now, it means they are delinquent in getting their SEC filings done, and required and “Extension”- not definitive, but more evidence of inept management. I have no idea when they will release their 10K- I don’t communicate with them anymore.
Did the company ticker changed to USEIE ??
Didnt find the announcement anywhere !!
Editor: Of course not- delinquent in their filings. Inept.
It is falling since I am watching it. Is it a good price to pick up? Is SEC filings and income statements are same?
Editor: I haven’t liked this one for sometime, and as you know it has been trading for months below my SSL. However, just as a guess, this failure on their part to be able to file their financials in a timely manner may in fact me more of an opportunity than a problem for a trade- not for a long term position. For some reason, this company is still screwed up.
USEI leaves me constantly scratching my head. Such a great product with great market timing, but management has just turned its back on shareholders…so frustrating, do you think they will make this thing work in time? I’m holding 220,000 @ $.275, I just can’t see throwing in the towel, but I am growing incredibly anxious over this one. Yes, I know I should have sold long, long ago and this would be a whole new ball game!!! Everytime the stock moved to a new low, I have thought it can’t go any lower. Again, just so, so frustrating with the incredible potential here.
Editor: Terrible position- I guess it points out the use of the SSLs. If that were my position, I guess I would hang in there for now. Things probably can’t get any worse, and hopefully will improve from here. If it doesn’t improve by the end of the year, take your tax loss and get some of your money back that way.
Chart is looking sweet.
Editor: Perhaps no one has any left for sale.
“Editor: Perhaps no one has any left for sale.”
How does someone go from SO hot to SO cold so quickly on a stock?? USEI has a TON of potential and you’re starting to see 400.000 shares sold on a daily basis.
While it’s probably not tomorrow’s big score (in Micro caps), don’t give up on this stock and don’t be afraid to give us an update every now and again??
Editor: What is there to update? The company doesn’t deliver any news, they couldn’t get their financials filed on time, they haven’t delivered much in the way of real sales associated with all the Thailand “orders”, and the company refuses to communicate with me. In addition, the stock is trading below my SSL- it was actually my second SSL- this is the microcap world and sometimes you have losers. This one is simply a loser so far, and I won’t waste valuable time on reporting on it unless there are positive developments and a spirit of cooperation. I’m not afraid to give an update- I’m afraid to waste the time when there are other ideas that are actually generating results to cover. If it ever wakes up, I can always pick it up again. If you love it, accumulate it for a return to some kind of decent market. Big risk, but could be big reward.