US Energy (OTC BB: HYFS) is a must own for your microcap portfolio in today’s environment.
I was sitting in a hotel in NYC last night watching CNBC and the evening news on all the major networks. Within 90 minutes I counted 7 reports on the high price of fuel.
With $3 gas here to stay, the price at the pump, and of course the price oil, have become fodder for the media. Expect a lot more of it as oil marches north to the inevitable technical price of $82 per barrel (that’s the subject of another edition).
I found President Bush’s remarks about supply/demand imbalances interesting. Want to knock $20 off the price of oil? – unwind the failing war in Iraq, or achieve the objective. Want to knock at least $.25 per gallon off the price?- get rid of this insane ethanol additive that no one is prepared handle at the refinery level.
HYFS has developed a retrofit system that converts diesel engines to a hybrid that burns diesel/natural gas. Cost savings are dramatic and there is no sacrifice of power.
In the Far East diesel fuels sells for upwards of 7 times what it does in N America- and they are working overtime to build using very heavy equipment.
If this company starts landing high profile contracts, in this environment the stock will simply go nuts- plain and simple. Remember what dot-com stocks did in the internet boom? how about oil stocks last year? The bubble is inflating again.
When I published last week’s initial presentation on the stock it was trading at $.28- since then it has seen a high of $.34- another perfect 61.8% retracement entry level. Here’s the chart:
Once again, the 61.8% retracement served as a nearly perfect entry level. I never ceases to amaze me how well this works. You almost always get a bounce off the 61.8- thank you Mr. Fibonacci. It works in the short term- longer term it’s all about corporate performance and being in the right industry group at the right time.
There is money to be made in alternative energy and fuel savings coming for some time to come. This is my first idea in this arena, and I expect it to be a huge win.
HYFS: This one is definately the right idea at the right time.
Comments and questions are welcome.
I hope the god that this idea will work better then the sure shot one you pushed a few years ago, remember stlof, it was suppose to be a great sucess, and a most own in your portfolio, yes i beleive in hybrid and others to replace oil, but certainly not from a company who trade on OTC or the famous pinky shits, to much dilution without control and without shareholders interest, time like this bring on so many crooks, look back on dilution perfect exemple of wonderful story that turn sour, fmly, ntdl, and so many more. I would invest in bigger company for oil substitut not the OTC, to many bad experience thank-you.
Editor: thank you for the comment. Seems like we are due for a good break on this one as the last one was such a failure.
Just to put things in perspective, i think we should warn investors of two facts, first you know what happen when the demand rise for any substance, the price just follows, what happen if the price of natural gas and propane go sky high because of demand, our invention become obsulete, and at the same time the price of oil hits bottom, that could happen very easy, i just remember so much when the price of oil was 9.90$ a barrel, that was around 1998, and at that time they were telling us that there was enought oil on earth to drown everybody, its manipulation by opec, and there shoothing themself in the foot, remember the oil crisis of the 70 th. they were giving away chrysler new-yorkers nobody wanted it, demand drop and price follows, in 2 years from now the barrel will be bellow 40.00$ and lower, and like the great bubble of 2000, all little investors investing in oil will loose there shirts, its happening all over again, when you ear every minute a comment about oil and everybody’s buying anything oil related dont matter what, it soon going to burst trust me, but the big guy will pump and use scary tactic before they unload en mass. just my opinion.
Editor: Thank you for the contribution.
I hope this one is a big hit also, so I wanted to add my thoughts. Yes the law of supply and demand moves the markets and that’s whats happening now. The 70′s did not have a red hot world market with huge countries like India and China clamoring for oil. The 70′s had OPEC who just tightened the supply and raised the prices. Today we are looking at short supplies due to increase world demand, not enough refineries to make oil into gas reducing the supplies of gas for our cars and again raising prices at the pumps. I agree gas and oil may go down due to decreased usage, but that will take a fundemental change in our national psyche. In the 70′s the speed limit was reduced to 55, car mfgrs were incouraged to produce smaller and lighter cars. It didn’t happen overnight but eventually our society changed. But here we are again, speed limits of 65 and 70+, SUVs, Hummers and big trucks. Everbody complaining something should be done. But until we as a society slow our butts down, use alternitave fuels, mass transit and other fuels besides oil (a NONRENEWABLE RESOURCE) we will find ourselves bowing to the law of supply and demand with higher prices. Hopefully soon the wake up call will come and products like HYFS has to offer will be at the forefront of the turnaround. Thanks for listening
Editor: All of your points are valid. However, it is my belief that a lot of the recent surge in oil prices is related to geopolitical risk. Note the recent breakout price is associated directly with developments with nuclear initiatives in Iran. I believe oil prices have run up disproportionately with demand- demand is inflated by speculators who are buying due to perceptions supplies will be disrupted by war. If this is not the case, why the huge run up in oil, without a corresponding rise in the price of natural gas, which is supplied regionally? Nevertheless, it doesn’t matter what element is driving it up. HYFS has an affordable solution today for mitigating the skyrocketing cost of diesel, and if they continue delivering contracts confirming the technology is being adopted, watch out for much higher levels.
I’m not totally up to par on the diesel/nat gas conversion. However I had dealings with gas to nat gas and propane conversions. they work fine, however the savings are not truly †here. Between the conversion cost, the cost of the lng or propane and the lack of convienent fueling locations. I know that ups and a couple of trucking line have been testing diesel/gas conversion. There is an additional cost from the government in using alternative fuels. Perhaps this will take off as long as oil stays up, but watch out if diesel ever drops back to respectable levels.
Editor: While the price of diesel is problematic in the US, it pales in comparison to the price of diesel in the Far East. I have heard as much as $7 per gallon. And- consider where all the world wide heavy equipment is working on a world wide basis. The key to the HYFS solution is it creates tremendous fuel savings with no sacrifice of power. The studies show the customer recoups 100% of their cost in 8 to 12 months through fuel savings. Depending on the price of diesel and the amount of use of the engine, it can be considerably sooner. Watch for major contract out of the Far East on this one.
I am a little confused about the company name. Is it US Energy Initiatives Corp. or is it Hybrid Fuel Systems? Yahoo shows both names, but ClearStation shows Hybrid Fuel Systems. Next question — The stock is down to 0.29 today. Is this a good entry point?
Editor: The name change is not fully implemented yet, so it is a bit confusing. Suffice it to say if you own HYFS, you own the right stock. FYI- I was just getting ready to write a BLOG on an awesome entry point for the stock. In short- yes.