I believe in the future of US Energy. I like what the company has delivered on the corporate achievement side in the mere 2 months I have been writing about it. I believe it is the right idea at the right time.
Let’s review:
- They are marketing a very exciting fuel saving technology for diesel engines. It takes a diesel, and converts it to a hybrid that burns diesel and natural gas together. There is no sacrifice of power with a great deal of fuel cost saving.
- The company is focusing its energy on the Far East, where diesel is $7 plus per gallon, and is hard to find at times.
- The company has sold numerous systems in the US.
- The company sold its first major order to a retrofit specialist in Thailand who order 1500 units as a starter.
- The company’s technology will be included in newly manufactured pick up trucks made by General Motors beginning in Q4 of ’06.
- The company just picked up a distributor in Europe.
- The technology works- the order flow proves it.
sp; So, with all the news, especially the GM deal, why can’t this stock get any traction and surge to a new high? Clearly the market is wrestling with some supply. Probably from a financing.
However, the post GM drubbing the stock took was very short lived. It is actually drifting up on light volume, which suggests that anyone who wanted to sell the stock has done so.
Here’s the chart:
As I see it, the area I have circled is one big consolidation. The market is grinding through the supply, and one of these days it will break out. A nice volume surge would help.
The timing of the GM announcement was horrific. It came during the teeth of the market melt down. Unfortunately, the stock didn’t trade enough volume to surge dramatically. It would have in a different market.
Another one to accumlate on dips. Eventually, persistance should break down resistance, and the stock should finally break out.
Comments and questions are welcome.
USEI just lost a third of it`s value acouple minutes ago .22
Editor: I noted that later in the day. I went back and looked at the time and sales. It looks to me like someone decided to sell 150,000 shares all at once with little regard for the price. This is what can happen in illiquid markets. The stock seems to be trying for higher levels now. Some recognized it as a buying opportunity.
Boy, this stock sure has “underwhelmed” us lately. One would assume that with the recent sales announcements that there would be more interest. What do you think it will take to move this stock?
Editor: Good question. We had a very vibrant market for this one prior to the big June sell off. I think it was a very poor choice to put out the GM announcement during the teeth of the sell off. I have been trying to discuss these issues with the CEO, but he seems to have dropped off the face of the earth. He might be in the Far East. The answer- keep the corporate progress coming and let the market take care of itself. I really like this stock long term. Impossible to predict in the short term.
so. revenues are 9 times. why isn’t this stock moving? is the cost of getting the 9 times increase more than was expected. I would have thought you would have had an update on this news. thanks.
Editor: I will at some time. I see this one as simply a victim of the market. I would hang in there.
From The Bangkok Post 21/7/06:
Tough loan terms for conversion to natural gas for vehicles (NGV) have been scrapped to make it easier for truck and bus operators to apply. Restrictions for the loans, offered under a joint programme by PTT Plc, the NGV supplier, and a number of financial institutions, were lifted following the poor response to the programme.
The seven-billion-baht loan package, available at eight commercial banks, was introduced in March, but only one million baht in loans were approved.
Lending terms required truck and bus operators to have been in the business for at least three years, to have no bad debts and to have made a profit the previous year.
These conditions had been scrapped, said Natachart Chakuchinda, PTT’s executive vice-president.
The change is expected to make it easier for truck and bus operators to qualify for loans. Bank Thai was the first to have approved loans under the relaxed terms.
If more truck and bus companies do not apply for the loans, PTT said it would take a billion baht from the pot to manage the cash without bank involvement from next month.
However, the separated fund would charge double the existing rate offered by banks, or 8%, to avoid lending risks, said Mr Natachart.
He urged truck and bus operators to take advantage of the availability of loans and shift to using NGV, because their fuel costs could be reduced by one-third.
According to Mr Natachart, a subsidy package providing help with NGV conversion costs for individual car owners would not be extended, but PTT would secure cheap loans for drivers who wanted to switch to NGV.
The banks taking part in the project are Bangkok Bank, Siam Commercial Bank, BankThai, TMB Bank, Kasikornnank, Bank of Ayudhya, Krung Thai Bank, and the Government Savings Bank. The government’s target is to have 500,000 vehicles modified to use NGV by 2010.
Prasert Bunsumpun, president of PTT, which is promoting NGV in its new developments, revealed that the company would increase the number of NGV service stations to 160 this year, up from 65 at present. PTT has also said it would cap the NGV price at its present level of 8.50 baht a kilogramme.
I submitted a comment earlier, which was not posted, regarding the use of NGV in Thailand. The only place it will be practical to use it is in Bangkok as the cost of upgrading existing petrol stations throughout The Kingdom would be prohibitive and most people are leaning toward ethonol use, in these areas.
Thailand is the biggest manufacturer of pick-up trucks other than The USA but the domestic market for these vehicles is in the rural areas – very few in Bangkok.
Fitting of USEI units to new-build diesel pick-up trucks would be best suited for the export market.
Well, that is my take on it, anyhow…………
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Editor: I believe that Thailand is just the manufacturing facility for the Far East. However, I believe I read they expect 70% of the manufactured vehicles to be sold in Thailand. The news you share appears to me to be positive. The government is obviously anxious to encourage natural gas conversions. With the US Energy technology, the vehicle runs on both or just diesel. Therefore, if you can’t find natural gas, there is no problem. Thanks for sharing this 411- I wouldn’t have thought to look in the Bangkok Post.
HI!
Do you still beleive in that play, what about the shares outstanding, i read that there is 110 million, is this accurate, and in my view there is way to much , whats your view, thanks.
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Editor: Yes, it is about accurate. It will probably go up a little as I’m sure they need more capital. I don’t feel it is too many shares at this price. What you have to look at is Market Cap. Right now, the market is saying the company is worth about $25 million. With what they have going on, I believe the market cap on this stock, in a more favorable market, could be $50 to $100 million easily. By stock market standards, that’s pretty small stuff.
What’s up with the meltdown in the stock?
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Editor: I just don’t know why the stock is trading so poorly. The sell off has certainly not been on very much volume, so perhaps a little volume surge will getting it headed back in the right direction. Perhaps just a sign of the times.
I am not a trader. I have the time to wait on this. As long as the this company has the financial backing, I feel we will be using either coal based natural gas or coal based desiel. so, do you feel this company has the financial backing to last until we start using coal based fuels. (I do not believe ethanol will be the solution- noticed the drought in the mid west?)
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Editor: Just so there is no confusion- US Energy has hybrid technology that allows diesel engines to burn a combination of diesel and natural gas. There is sustantial cost savings, with no sacrifice of power. They are selling systems in the Far East, where diesel fuel is in high demand and extremely expensive. In answer to your question- yes, I do believe they will have adequate financing in place to get to significant revenues.
I see that you did’nt post my last post, now you confirm my view of pump and dump, thanks.
Editor: if you have some constructive commentary, or want to present some fundamental facts, they will be published. If you want to bash over 4 year old events, go elsewhere. It’s all about corporate performance. My subscribers in CPNE are enjoying a 300% run in the last 4 months. And that’s just one. There are many more. Get a life.Â
USEI at a bargain price ? The company is obviously starting to earn some money ( revenues are enhancing ). Development costs seems getting more and more into control. Only selling costs is still a problem. But as it seems to be, mouth to mouth, or if you wish client to client promotion just gets to start off. A possible problem is the price of natural gas, at least in the mind of some investors. However, gas price in Western Europe is still considerable lower than diesel price and even if Gasprom is asking a higher gas price to its environning states, its upper price continues to be still below the price of diesel. So, a considerable ‘gain’ to the companies converting their busses and so on with the USEI equipment still make a considerable gain.. and so I believe USEI will.. in time. How much time, I don’t know. It might indeed be mid 2007 before USEI reaches a share price of 1.00 USD or perhaps much more.
I would say, be patient and you’ll see, actual share prices will prove to be an enormous bargain.
Editor: If there were not a potential reverse split looming, I would agree wholeheartedly. For my money, I want to wait and see what management does about this reverse split. Other than that, a definite tax sale oversold situation which could bounce quite easily from here.