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I would like to see a Seeking Alpha contributor do an article on UGSI. SA seems to get widespread readership and articles written by their contributors are posted on many financial sites.
But do your own DD.
Thank you Pro-Life. Honest opinions give us all different perspectives to consider. I need all the help I can get.
Not to poo poo those numbers, but installation costs include those variables plus several others.
Regardless, since we don't have hard numbers to measure the company's progress, I still try to look at the company from a "global" perspective of from what information we do have available (which is mostly information about new projects). From that, I continue to sense the company is continuing positive growth in at least the pipe installation side of the business. I've not seen enough bits and pieces about Chemfeed, etc to really understand how they are doing from a growth and profit perspective.
Might continue to be throwing good money after bad, but I bought another 30K shares last week and will buy more if it dips back down much. But for now, I am glad to see it at .155.
But do your own DD.
I'm wondering if the Section 13 exchange was for existing common, instead of preferred ?
The details aside, I continue to like the Riverwood financing event. I won't be surprised if another deal is done with a BDC. I don't like the issuance of preferred or common in exchange for such deals, but sometimes it is necessary to fund acquisitions.
With that said, I feel better right now about UGSI's future than I have in a long time - considering the scant information we all have to work with. I invest in a lot of biotech startups that usually have no drugs on the horizon for approval and usually little working capital - which requires periodic floating of new stock issues. My point is, I then think of the comparison of those risky companies with UGSI, that, it appears, is making some good money and has positive growth prospects. When put into that perspective, it is much easier to justify my continued buying of UGSI stock. ((Just don't tell my wife))
Just my opinion. Do your own DD.
No one likes debt, but sometimes it is necessary. With that said, looking at the PSI acquisition and borrowing from Riverwood from a global view, a couple things strike me about it.
The first is acquiring PSI, from what I can glean from what they do, and what we know UGSI already does, it might be a good fit.
Secondly, no one forks over $45 Million bucks unless they have a high degree of confidence in your ability to repay it. And looking over Riverwoods "Portfolio" in its website, I like its clients. One pretty public one is Go Pro. So, Riverwood has probably been around the block, and that gives me some confidence that the Riverwood financing injection, and the PSI acquisition could be positive to UGSI going forward.
I believe Thunder provided a good commentary to this financing. I found the below somewhere I thought I would share:
Series C round Meaning:
In venture capital terminology, the term Series C Round refers to the third round of financing in the Early Stage Financing cycle. The Series C Round financing stage represents an additional expansion stage for the company.
Series C round Example:
For example, the Series C Round is the financing stage where the company has proved success in the market with a potential for a larger market. It probably has an exceptional management structure and a history of growing profitability. At this point, the venture capitalist will have already passed the break even point and is now looking for an exit strategy. Series C Round and D Round financing represent the final stages in the Early Financing cycle. As such, they are the last steps in the company’s growth cycle before the Initial Public Offering or the sale of the company to another group of investors.
But do your own DD.
Now, now………..
Maybe Sewer was just having a bad day.
Obama, I believe this is a good board. Various opinions and free thinkers. No one believes they are absolutely right on anything.
Now, if we can just calm Sewer down a little…………
I realize what is contained in this shareholder letter doesn't tell the full story about UGSI. Such as the debt level, profit margin, etc. But it would be very tempting to dump a lot of money into UGSI based on this and past letters.
But do your own DD.
Sewer, I believe you just opened the door for a good pissing contest. But I'm not biting.
But it is too bad some people can't accept others opinions - even when the reader believes they might be out in left field - sort of like mine might be sometimes (or maybe often). But they are mine, and I am not backing down from them.
Sewer, have a great day my good man!!!!
Yes, talk about lightening up, come on Sewer……………
I understand that most or all of us who post here about UGSI probably know as little about the company as the next guy. But, for what its worth, I took my name off the UGSI quarterly email list issued by Andy some time ago for exactly that reason. While I am obviously curious about the future of UGSI, I do not want to receive or have access to any insider information. I want to outsmart other investors by identifying rising stars before they do - not by possession of information I shouldn't know about. If that is taking all this too seriously, so be it.
But to each his own………..
UGSI is all about holding on and hoping management is generally making sound business decisions towards growing the company. If they do, investors may do well in the future (whenever that is), and if they don't, at least in my case it won't be the first micro cap I've lost money on. But that's just the risk of investing in these sorts of companies. But being someone who has held a lot of shares in this company for over 10 years, my confidence might be blind, but only time will tell.
Thunder, I generally agree with most of your assumptions and opinions. Yours are just as valid as anyone else's on this board. Stay with us.
Obama, could be some transactions based on knowledge or suspicions of future events, but I tend to think it is nothing more than a few UGSI shareholders tired of holding it and worried about the low price, so just dumped it.
All of us here have seen the comments here and there about the future cost to repair our water and other infrastructure systems, so such projections don't surprise us.
A recent one noted there are an estimated 240,000 water main breaks a year in the US, and it is estimated by some that it will cost more than $1 trillion to expand and replace outdated pipes over the next 25 years.
I believe that, and there will no doubt be a day of reckoning when water companies (both private and public) are losing so much water through line breaks that they can no longer afford to just let them continue to leak.
Guess I didn't get the memo……..
A detail about Cappeline. I believe he was the COO of the chemical division of Ashland Inc., and not the COO of the parent corporation.
I suspect the frequent posters on this board look at UGSI a little differently than most investors do. That is, although it appears to be gaining credibility as a company with useful products and services, and the expertise to apply those products and services, it may still be viewed by others as a small startup with a long way to go before becoming a force in the infrastructure industry. Add to that it is a penny stock and some will just not gain any real interest in the company as an investment.
Like others here, I don't know much about the details of the company's operations, such as the exact source of its revenues. That is a key piece of data for me. I only know that it markets the sale and installation of fusible PVC pipe, and some other products. I don't know anything about the business relationships with pipe manufacturers or project contractors. If the company doesn't own and operate its own pipe manufacturing plant(s), what does pipe cost the company, if it actually buys pipe. Or does it only get a patent fee from pipe manufacturing. Or, more simply, does it not have anything to do with certain PVC pipe manufacturing or manufacturers. That is, installation contractors buy PVC off the rack, and UGSI comes into play in being a party to projects and the use of the company's fusing equipment in the pipe installation, and takes a slice of project profits. Again, where does its revenue streams come from.
Well, the beauty of being a non-reporting company. We assume the company will someday want to list on one of the major exchanges and up the anty on how it is viewed as a company. Sure, some of the insiders of the company will likely make a lot of dough from being listed on a major exchange, but if the company is rolling in the dough at its current operational stage, they may be perfectly happy cashing those checks and being able to operate the company "under the radar" as essentially a private company.
My point is, if good things are in fact happening with UGSI, management and insiders may be in no hurry to cash in. I would hope that the reason management is taking its good ole time in leaping to the big time is because it has more work to do before taking that step. If that is the reason, I am willing to wait a while longer, as I still believe (from what I can glean from available snippets of public information) the company is making continued progress. If so, that's a good thing. I can live with that. As a UGSI stockholder, I just want progress towards becoming more profitable in what it does.
I always focus on company management. What is their experience and backgrounds. From what I can see, current top management has taken M. Smith's vision and developed it into a bona vide company, with real products and services and a growing demand for those assets. We all know the company's products and services are needed on a large scale in the U.S, and no doubt abroad as well. We all also understand that many governments and utilities put infrastructure projects off as long as possible, and particularly in weak economic environments such as we've experienced the last five or so years. But just as we humans must eat (and why well-managed food suppliers are a pretty safe bet), there will come a day of reckoning when those thousands of miles of pipe must be repaired or replaced. From an investment viewpoint, to me those old pipes are "meat on the table". I have no doubt UGSI and other such companies will have their day in the sun. It's just a matter of when.
But do your own DD. I know no more than any of you.
Since I'm likely the culprit being referred to here, let me note something.
I absolutely believe organizations (whether companies, non-profits, etc) should have their books audited on a regular basis. What I was trying to say is that unless UGSI plans to issue an IPO they may elect to forgo a full audit until they do. I would hope they haven't. But like so many issues about this company, we know little about its finances or audit policy. And yes, some business partners may have required audited books before entering deals or lending money to the company, but who knows for sure.
I'm on board with your opinions on this subject, but that doesn't mean UGSI management agrees with us. As someone suggested, if and when they issue the IPO we will know they have performed a complete audit and its finances are (presumably) squeaky clean.
Obama, I agree, but I would be surprised if their audits are to that level, as they DON'T answer to current shareholders (possibly including even the few institutional investors), and creditors and suppliers probably don't care about the details of the companys financials - they only care if UGSI's checks cash.
But just my uneducated opinion.
I do all my trading with Fidelity, and I have never had a problem trading UGSI, in any volume or price point.
Well, and interesting day. I would rather see unpleasant prices and some volume than no volume.
After it hit .127 I tried to buy some at .129 but missed the distress selling.
Well said Sewer.
Sewer, what I will say is that while most of us regular posters here obviously would like to see UGSI finally take off, I do believe most or all of us are objective in our views of the company. Time may prove us wrong, but I appreciate the honest opinions, even if I don't sometimes agree with them.
Obama, I don't believe any of us can answer any of these questions, such as why would UGSI float an IPO, or not.
While I am certainly not an expert in such things, it seems to me that it would depend on managements desire for capital. The company might be making money, but maybe not enough to satisfy their needs. If they need capital to expand, I suspect their decision of how to raise that capital would revolve around the same basic questions as most any company. That is, if selling debt, what interest rate and other terms would a small company like UGSI have to pay, even though rates are still generally low.
Yes, they might still have an aversion to "reporting", but the lure of an infusion of no-interest capital from an offering might just be a pill they need to swallow to get that capital. Of course, who knows how a stock offering would be received by the market? If not positively, they may have no choice but to borrow money.
I am going to assume that management knows what they are doing, and they realize burdensome debt is not a good thing - unless its absolutely necessary to expand the company. If so, they may continue on the past "company building" towards improving their credit rating (because someday they WILL need to borrow money) for debt issuance, and also towards helping to gain recognition as a bona vide enterprise both in terms of market products offered and financial stability. All that, if it happens, should help grow the company.
Thunder, you lay out what I believe are several valid reasons why UGSI has a very good chance at continuing its past progress.
But with its current non-reporting status, and micro micro cap position, it gets little press or attention. Stocks like this are the Rodney Dangerfields of the stock market.
With that said, those of us who have found this company, and invested in it (some of us heavily) are the sort of investors who know potential and are not afraid to roll the dice on a companys future. I've invested in several such startups (mostly bio-techs) and won some and lost some. But I've never wavered in my support of UGSI. As I've said on this board more than once, as long as I see continued progress in building the company, I'm hanging on.
Obama, I agree on the difficulty of infrastructure owner entities moving forward with the renovation and repair work that needs to be done.
But what keeps me invested with UGSI is they can't put it off forever. Even the tight-fisted conservatives and Tea Party folks will not be able to argue against needed projects at some point.
I suppose that is one of the reasons I continue to hold on to UGSI and a couple other infrastructure companies. That is, the demand - someday - for the products and services UGSI can provide. Even if UGSI gets only a fraction of the money spent for such projects, it could be huge.
Looking at it another way, I would rather bet on companies in the infrastructure business (where there is unbelievable potential demand), than companies, say, in the lawn care business. Yes, an extreme and silly example, but you get the point. My guess is that is what created the development of UGSI's products in the first place - potential demand, as is needed for every new business venture.
With all that said, I am willing (at least today) to hold on a while longer and see if UGSI can capture some of these projects. If I get the feeling they are not gaining ground, then I'll dump my shares. Rome wasn't built in a day, as they say………
But do your own DD.
I agree Sewer.
None of us like the price dropping back to these levels, but it is what it is. I believe the past few months have been nothing new - just more of what UGSI has been doing for a long long time.
The question is what exactly is the company accomplishing - if anything - to continue to build the company and the brand. We continue to have little information to answer that question.
All I know is - or so it appears - UGSI continues to work the infrastructure market towards securing projects and hopefully performing as needed in those projects. That's all as an investor I can hope for in a growing company facing stodgy engineers and management who won't stick their necks out.
But that's okay, because I continue to believe UGSI is on to something, and the market demand is there - and that market will come to us over time. If I'm wrong, that's life. Will have sat on a sizable investment for a while (over 10 years now), and gotten nothing much for it.
I'm not giving up just yet. Time will tell, but I think someday a lot of us will look back at these .13 to .15 prices and wonder why we didn't buy more then.
But do your own DD.
Whatta gonna do……..
This is my "swing for the fences" stock. Come on Andy, help out the faithful.
But what the hell, if I can wait ten years, I can wait another ten years (if I don't croak first).
Someone sold, but someone bought. If I had any available cash I would also be trying to buy some at .135 to .15. But I'll have to sit this dip out.
This is nothing to get excited about - unless you are a buyer.
I'm sure these new AWWA standards will take a while to circulate around to those who design and approve projects, but a good thing nonetheless.
I agree the AWWA acceptance is a positive step for UGSI. As someone has noted, engineers cannot and will not recommend the use of a product of any kind that is not somehow certified, or where certification is not appropriate the product has proven itself over a period of time. Engineers PE certifications, not to mention their reputations are on the line for recommendations that don't meet certain standards.
I do not believe this long road to AWWA certification is the fault of company management. Rather, I believe it resulted from the cautious nature of the utility industry, as well as the opposition from competitors. That is, UGSI management has gotten through the entrance gate finally to acceptance of its primary product. Projects and revenues should follow. Yes, not a rush to use UGSI products, but interest which will likely grow over time.
That is all we can ask. This is a good thing.
Fred, I suspect we all understand why you cashed out of UGSI. But we hope you stay connected with this board and give us your opinions. Maybe someday you will renew your interest in UGSI.
Good stuff Thunder. One of the elements of investing is the diversity of opinions of what a company is worth. What the economy is going to do tomorrow. What industries are going to benefit or suffer from any such change. ETc, Etc.
And in the end, its that diversity of thought that allows buyers to buy and sellers to sell. If not, there would be no markets. So, Fred, are you wrong about UGSI??? Only time will tell, huh?
Fred, can't speak for Thunder, but I don't believe I've ever said UGSI is a good or bad investment. To my knowledge I've always contended that I've based my opinions simply on 1) my guess of the possible demand for the products and services UGSI appears to provide, and 2) what I can glean from Andy's periodic reports. That's it. While I listen to the posters on this board and any other data I might find here and there (whether directly related to UGSI such as new projects, or general industry data), I base my view of the company on what I feel the company might be able to achieve in the future - if the stars fall into the correct alignment. Is that scientific enough to invest a bunch of money into UGSI? Probably not. But its my money and I can invest it as I wish, just as everyone else.
While I, as I've said more than once here, am as frustrated as the next guy with the lack of corporate achievements towards what we here want to see, I will say that I believe the "quiet" approach taken by Andy and his staff is better than the constant "marketing" efforts we saw from Mark Smith years ago. That is, all the news releases every time someone farted that was related to UGSI. Yes, it put the companies name out there, and yes, it likely resulted in stock price hikes here and there. But as we all knew then, those price hikes mean't nothing more than most of the information we still get today.
So, yes, we are shooting in the dark. I know that. But I have been and remain willing to risk a bunch of money on this company - based almost entirely on what I believe this company has the ability to achieve. Isn't what we investors do with most all investments we make? Sure, an investor who is thinking about investing in IBM has a ton more information availiable to them to make a final decision of whether to pull the trigger. But in the end even with all that data on IBM we are still guessing about what we believe IBM will or won't achieve in the following few months.
So, yep, Fred, its a crapshoot. But isn't much of life?
Obama and Thunder, I agree with both of you. Obama, I believe you used the correct term of "undervalued". Who really knows if the company from a fundamental viewpoint is "undervalued". We won't be able to better determine that until we see some numbers. We outsiders really don't know how much revenue the company has, and the sources of that revenue. I am probably more curious about the sources than the actual revenue numbers. If anyone has any good guesses of the answer to that question I would be interested in listening.
With that said, I continue to buy a little here and there at these prices. But do your own DD.
Fred, Fred, Fred. Yee of little faith…….
On the other hand, we all only have so much patience. Your desire to unload some of your shares is understandable.
Are you listening Andy???
Fred, we share your pain. As I just noted in a post to Sewer, UGSI is costing me quite a bit of monthly interest on about $200K invested in this company.
But as you well know, you can sell your shares whenever you want. I just hope your acquisition cost is less than .16. Mines not. But, what the hell, its just money.
With that said, Merry Christmas !!!
Sewer, as I've said here many times, I'm as frustrated as anyone with the long road we've walked with this company. My biggest frustration is the lack of information (revenues, sources of those revenues, operating expenses, etc). If I/we get those numbers and data we can finally decide whether we want to stick with this company. But we won't get that until they begin fully reporting, and management will make the decision to do that, if ever, on their timetable - not mine.
As to talking with others with large positions, sure, nothing wrong with that it seems IF they will share their thoughts. But I'll be surprised if they do.
Sewer, I've got about $200K locked up in this company, and I continue to buy when it dips like it recently has. Ten or so years and counting. Yep, I might wake up one day in the future and decide I've had enough. But, for now, I am willing to let this ride at least for a while longer.
I believe this company has the ability to make investors a ton of money. But only time will tell. I, like Thunder, believe a PE company will someday see its potential and grab it up, or at least take a majority or large ownership position. I believe that is more likely than them being acquired by a utilities-related company of some type. I invest in a few BDC's and could see such a firm liking UGSI's potential and throwing some gold at it.
Anyway, just my opinion. I know no more about this company than you do. Maybe less, so do your own DD.
Sewer, I can see no reason why UGSI management, and all those holding a bunch of shares, wouldn't want to see the stock price say, $5.00, rather than $.16. They might be drawing healthy salaries, but everyone gains from a higher stock price - and likely them more than us.
SewerDog, maybe you will win the MegaMillions and you can pump up the trading activity on UGSI.
Or maybe you can buy the entire company, although buying an island in the Bahamas sounds better.