US Energy posted its numbers early today for the June quarter, and they were pretty much as expected. The 10Q is that of a development stage company making the transition to a commercially viable entity.
The top line was a fledgling $1/4 million in revs- not much to talk about. The company boasts that top line improved by 624% over the previous year, but it still does not amount to much of anything.
USEI has notched about $2 million in losses through the first six months of the year, and most of it is non-cash.
Numbers should improve dramatically in coming quarters as the company begins to deliver on the numerous major contracts it has landed over the last few months. They start delivering on 1500 systems to GreenGas in Thailand in September. 2000 systems for Truckgas in Europe are slated to being delivery early next year. The GM OEM arrangement kicks off in December.
Furthermore, I don’t believe there was any contribution for acquisition Automated Engineering corp in Q2. The transaction closed on June 15, so there would have been little or no contribution to the top line numbers.
Here’s a current chart:
The stock has bounced off an extremely and absurdly oversold condition. I’ve circled what I call the “easy money rally”- the move off that level was just an oversold bounce.
As usual, the stock pulled back to the standard 61.8% retracement level, and climbed again.
With the market becoming more favorable everyday, higher levels seem likely. Gains from here will probably be won with corporate developments, many of which I believe are still ahead. Once this consolidation phase ends, the next volume surge should take us to a higher level than the last surge.
This one is a great speculation that should keep improving for the forseeable future. Continue to accumulate.
Comments and questions are welcome.
Another of your great must have pick,s sinking, another perhaps STLOF, they to had a contract with Jaquar I beleive, it was also a must have in any speculative porfolio, can you elaborate why this one should be different, with huge amount of outstanding shares ?
Editor: as far as the shares outstanding- it is what it is. No comment there. It would be nice if there were less shares I&O, but the market cap is quite reasonable. As far as the fundamental difference- it is huge. You have to be brain dead not to see it. STLOF was a development company who’s technology was never adopted and it failed. They never had a contract with Jaguar- they just put a system on a Jaguar. I learned my lesson. USEI is a development company who’s technology is now selling and being adopted by users. 2000 retrofit systems to Europe. 1500 retrofit systems to Thailand. Multilple systems all over the US. GM is including their technology on pick trucks being built starting in December in the Far East. If you want to focus on a failed idea from 2001, then I would suggest this is not the right end of the market for you. STLOF was a failure. USEI could be a failure as well. However, it’s too early to call it one way or another. If you want to focus on failed speculative ideas from 4 years ago, this is not the right end of the market for you. Get out. You don’t understand how to put your losers behind you and move on. Whether it is this newsletter or the microcap world in general, this is not for you.
oil will most likely stay high and even move higher, despite what some analysts are predicting, natural gas will probably stay within a range that makes USEI’s system very cost effective for the forseeable future, don’t forget that this system once installed, can be disabled with the flip of a switch, if oil prices plummet and/or natural gas rise temporarily, and then re-enacted with the same flip of the switch, it makes sense for companies to have this system in place on their truck/heavy machinery fleets, the bottom line is that this company is not yet in the black, but it looks very promising for the future, as for the stock price, it has pulled back a bit, but just give it another quarter or two!!
Editor: Thank you for the contribution as that sentiment mirrors my thoughts exactly. It might take some time for the market to recognize what’s going on here. We should have a good Q4 with this one if stocks are trading better. Good one to accumulate while it’s quiet and no one wants it.
Any further developments on expanding markets on China? There was news quite a while ago, but nothing since.
Editor: Nothing recently- would love to see this one start to behave better. Hoping to see it much higher by year’s end.