FASC analysis and comparison to other penny stocks, updated.......
1) Share structure rates very high due to the fixed number of shares for over 4 years. A fixed outstanding share count in a penny stock is unheard of. It's not even the norm with big board stocks. Coupled with continuing company growth which creates demand, a fixed supply of shares has huge ramifications for the pps.
2) Business model also rates very high because the company has been set up to move the lion's share of development costs to its joint ventures, licensees, and other resellers. The company's own general and administrative costs are virtually insignificant. This is another aspect that is extremely rare for any public company, and coupled with the margins on KDS sales, lends itself to an easy path to profitability.....also rare in penny stocks.
3) Growth and growth potential...sales growth itself has been inconsistent, but all of the signs we are watching indicate marked improvement over the last year, including independent confirmations of KDS sales/shipments via independent sources. There have been some missed opportunities too. Growth potential based on current structure (worldwide resellers in place) and industry factors (Kyoto protocol, fast growing Euro Asian markets, friendlier guidelines in Quebec, B.C., California and now U.S. EPA) remains huge.
Overall, I would grade FASC fair in its growth history compared to other penny stocks, but now coming on. I would still rate the % growth potential as very high in comparison to other penny stocks.....and many bigger board stocks as well.
4) Balance sheet had weakened over the last few years due to a period of no sales. Signs point to a strengthening balance sheet with debt being paid down from cash flow from recent sales. No interest bearing debt and again, fixed number of outstanding shares. Overall compared to most penny stocks....very good.....and needs to be continued.
5) Management....given the loss of a prime member of a very small staff a few years ago, this has been a weakened area. However, a small staff has marshaled through by deferring salaries and loaning money to the company when needed....and hasnt requested more shares. It has also been very quiet and has fallen behind on its SEC reports over the last two years, following 16 years of reporting. Indiators are that reporting compliance will resume shortly. So, a mixed bag overall in terms of comparisons to other pennies. The addition of one or more members to the management team could help considerably.
6) Business sector......biomass.....given its aspects as a renewable sources of energy and by-products.....an excellent sector to be in, ranking very high in the penny stock or other stock world.
7) Technology.....The KDS has found and developed a number of niches in the field of biomass. The applications as to wide varieties of biomass are almost endless. There needs to be more targeting and developing of significant specific markets.....wood pelletizing, palm EFB, and sludge treatment, as examples.
The technology is steadily gaining visibility and is able to yield small lots of sales. It hasn't yet been able to break the barrier of 4-6 sales in a single contract, yet those possibilities remain across a range of biomass applications.
When I step back and look at overall comparisons, it remains extremely difficult to find a better risk/reward stock in this penny field.
