Friday, December 29, 2006
Because this stock is volatile. Extremly so. Plus it's trading so far below it's historic high of $8.50 set back in August 1996 - and our position size is so small - that we can afford to let this one ride for awhile.
Let's just see what happens here... Once some news hits of the company's coal-scrubbing tests (with a major global energy producer's working plant), and the other triggers are hit in January, we could be in for a very fun ride.
If something unforeseen happens and the stock simply hits the skids and goes down for the count, we'll dump it.
Till then, mind our other stops,
Thursday, December 28, 2006
Hold your breath and consider making this play... We're talking about a small company based in New York that has several major things going for it that could "begin producing some relatively big revenue over the next six to 12 months" according to Money Central.
The company is called Solucorp, and it's listed in the pink sheets, so clearly it's a speculative play. (Even though the great James Brolin is the company's spokesperson.)
However, it could be a tremendous - if rather unsexy - play on industrial cleanup because...
- It has a patent on an amazing chemical compound - MBS - that reduces the spread of noxious chemicals from heavy metals at waste disposal sites... Known as a Molecular Bonding System, this compound changes the chemical makeup of such metals in such a way that they cannot leach into the soil, affecting groundwater and destroying soil.
- The company just signed a letter of agreement with ENI, an Italian energy conglomerate, that "could potentiallly bring hundreds of millions of dollars of work in the coming years," according to Money Central. Additionally, MBS is being considered for major cleanup programs in Massachussetts and also in Warren Buffett's hometown, Omaha, Nebraska.
- The company will be implementing an important test of its technology designed to clean the emissions from coal-fired power plants, in January, and the test results should be reported in February, according to company CEO Richard Runco.
"Solucorp's patented Integrated Fixation System (IFS) mercury emissionscontrol technology has opened vast opportunities in the multibilliondollar coal fired furnace industry. Mercury pollution is one of themost widely reported and greatest concerns facing the environmenttoday. Solucorp's technology is currently being implemented into aworking coal fired power plant. The commencement of full scale testingawaits delivery of back-ordered parts, and is expected to commence ina dry scrubber operation in mid January and the results will be announced before the end of February.
"Independent testing to dategives Solucorp high expectations for impressive results that will lead to the commercialization of its mercury emission control technology inthe worldwide coal fueled power plant industry in 2007."
Two things to keep in mind here...
A Play on China's Coal Obsession?
The company has successfully marketed its green technology abroad, having signed an important contract with $60 billion Italian firm ENI... This could be important when it comes to exporting its coal-plant-scrubbing technology to, say, China... which will be more than 80% dependent on coal even in 2020, according to the Energy Information Administration.
Second, it has just secured the services of public relations firm Bibicoff & Associates, Inc., to raise the company's profile in the investing world... This is the kind of media savvy that could help a company like this, and shareholders, very quickly.
Plus, the company's leadership is working on updating its auditing and reporting processes to make it more transparent. Some in the financial press are predicting that the company could jump to the Nasdaq soon after its auditing processes and cash flow are optimized.
Taking a small position now could pay off big... The stock is up 76% this year and is beginning another uptrend. But this is a total speculation play... this is for your "fun money."
Buy Solucorp Industries, Ltd. (Pink Sheets: SLUP.PK) at market, which is currently $1.50... Place a 40% trailing stop on the position meaning sell if it ever closes below $0.90... or 40% off any high attained during our holding period.
We have almost three months to go on our $25 KEP calls... It's not terribly likely they will catch fire, but if they do, it could be good.
More to come...
BG: Trading at $73.12... Recommended at $72...
KEP: Trading at $22.78... Recommended at $22.60...
KEP Calls: Trading at .15... Recommended at .15
Tuesday, December 26, 2006
We'll have another pick to add to our Evergreen Portfolio soon. I'm looking at a very intersting little company that makes a drug the U.S. government desperately wants to stockpile. A colleague of mine who is very good is recommending this little drug company now. It could protect people in the case of some kind of nuclear attack or accident. We think that would be a good thing.
We could also be adding some more commodity plays to the portfolio if we can find good ones... No strip miners, coal, or petro companies to be sure. But perhaps more innovative producers or processors of agricultural commodities would make some sense. Commodities have been savaged this year, and the shiny luster has worn off.
As Jim Rogers told me a couple years ago when I talked to him on the phone: the dips in this commodity bull market will be rather breathtaking. Same with pullbacks in China stocks. But in both cases, Jim says he's buying. Makes sense to me, and his track record speaks for itself.
More to come.
Our second pick for the Evergreen Portfolio will be Bunge. This diversified agribusiness is involved with the feeding of millions of people around the world, including much of Asia. Like our previous pick, KEP, this company provides a very basic thing, in this case lots and lots of food and foodstuffs.
Bunge is growing at 10% per year. It's trading at good multiples now, around 20. But this isn't a fad play, and it's not really even a short-term idea... This is a play on the growth of the human race, the fact that the world's population is going to double very soon, and that China will increasingly be requiring better and more food for its growing population.
On top of all this, Bunge is perhaps one of the lesser evils when it comes to Big Farming...
It's very active in the development of biofuels here in the U.S. Here's some information on their latest project in Illinois from our friends at Green Technolog:
"Gov. Blagojevich also announced today that Biofuels Company of America, LLC in Vermilion County is receiving about $4.8 million Opportunity Returns grants to construct a new $30 million biodiesel production facility in Danville. This project will create about 15 new jobs. Additionally, operation of this facility will help secure up to 100 existing jobs at an adjacent soybean crushing plant. This project is commonly known in the area by the name of one of its major investors, Bunge North America.
"This new plant, developed by Biofuels Company of America, LLC, as a partnership between Bunge North America and Biodiesel Investment Group, LLC, will be a 45 million gallon per year biodiesel production facility. In addition to the biodiesel fuel produced, the soybean oil the plant will use as feedstock is equivalent to about 30 million bushels of beans annually."
A colleague of mine who is now reseaching and writing from Australia, Dan Denning, recommended Bunge in his terrific book Bull Hunter. I'm recommending it now.
Buy Bunge (BG) at market. The stock is currently at $71.00, so we'll make that our entry point for this pick. We'll sell Bunge if it closes at 40% below any high it achieves from here on... And we'll reserve the right to sell at any point above that too.
Currently trading at: $71
Currently trading at: $22.78
Monday, December 25, 2006
Our first recommendation for the Green Investments Core Green Portfolio will be a value play... one that promises to remain in the Green Investments portfolio for some time... It's Korea Power and Electric Company (Kepco), with the symbol: KEP.
The reasons we like this South Korean energy giant are many: a monopolistic lock on the South Korean Electricity Market... solid management... a centralized location within the Asian renaissance... a Western-style democracy surrounding it... but there's more...
KEP is also partnering with Datang, one of China's largest state-run energy companies, to provide enormous wind-turbine powerplants behind the Great Wall... We're talking about historic-sized projects that could pave the way for a cleaner China... and a steady acceleration of profits for KEP.
The chart shows a steady climb up... and we expect it to continue...
However, keep in mind... this isn't a 10-bagger play... This is a conservative beginning to what we hope will be a nicely balanced portfolio of growth and value... with a leaning toward growth.
KEP's earnings through September were at $24.8 billion, up 18.8% over last year's numbers... The company is #240 on the Fortune Global 500 list... This is a big, powerful utility located right at the heart of the Asian boom... and along with good fundamentals, shares could be depressed due to the very unlikely threat of nuclear attack from North Korea.
More on Kepco to come... and more picks...
Buy KEP at market -- currently $22.66 -- up to $24. Speculators can consider the March $25 calls (KEPCE.X) currently trading at $0.15, but don't pay more than $0.30...
- ► 2007 (144)