Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
I think they are putting out PR every day... oversold and undervalued down at these levels. Let's let this water revenue play out and see what happens. Great value down here IMO. I've read that on average of 3 times a week as we've gone from $.40 to $.01.
PC - I'm going back and trying to piece together exactly what happened to drive the PPS to this level. I came across the below post. Do you still see a quick rebound to the normal trading range above $1.00? If so, I think the upside is incredibly enormous down here at $.03-$.04 range.
Prudent Capitalist Wednesday, 07/15/15 05:16:57 PM
Re: mcflow2 post# 1485
Post #
1489
of 3043 Go
No worries. STWS is still very undervalued trading down here near the bottom of its 52-week trading range of .28 - $4.26. And, with the recent PR's and as the company moves forward with execution on the 20+ ongoing projects detailed in the recent conference call, STWS should very quickly and easily resume trading up in a more normal trading range above $1.00. There is incredible upside potential here near term
Please consult the reported financials. I argued these same points at $.40/share and look where we are now. I'd say I have a pretty good idea of what I'm talking about. Ingenious really, LOL
I couldn't disagree more. Time and patience can't be afforded without further financing arrangements. We've seen from the financials they've already resorted to factoring their receivables and were down to -$0- cash on hand, with ~$670k in book overdraft. IMO the market has valued this perfectly and barring some surprise financing agreement, are on a clear path so insolvency.
"A lot less losses from oil biz and a whole lot more water revenue"? That is a recipe for disaster. Oil biz is the only thing keeping them alive.
LMAO Energy as a stand alone has been the only profitable endeavor. Reviewing segment financial reporting reveals water is a loser, and the more revenue the more loss. Let's wait and see how bad the 10K is, but IMO it's not going to be pretty. The only crutch they have, energy services should be way down, or else they are defying gravity. We saw what happened in 3Q15 with the big "ramp up" in water revenue, we saw a big "ramp up" in water losses.
Fundamentals just aren't there. Water demand, arguably should be up, but again not at prominent as it was two years ago, energy construction has to be plummeting, and again, the biggest problem for STW, cash, is running out. Management is pulling executive compensation in line with comparable companies with revenue exceeding $500m/year and giving the shareholders nothing. These flips of $0.05 up and down is nothing more than trading activity and as MFJ quoted, playing chicken.
That was kind of my point. If you were fortunate enough to buy in at $.0199 you can make some really nice profits at $.04, but there is really no long term value here. I imagine in my head 5 or six traders rotating chairs hoping not to catch the pointed in. No serious interest here.
Very dangerous for the casual reader/investor. Pretty clear we are in trader territory now, not investor. Probably some really great opportunities to buy sell some blocks for quick profits, but absolutely no long term value here IMO. Unless we see a major cash infusion soon, there will be no longer term opportunity. Expect decline in Energy Services revenue, decline in water revenue from 3Q15, and further losses when 10K is reported. Sitting next to all time low PPS, after losing 90% of market value, and almost no activity. Market has made up its mind, and in the words of your next republican candidate for POTUS, this is a big time loser.
Agreed...there's really nothing to see here or comment on until the company speaks, or the release of the 10K.
I think we've seen how long the process is (actually we really don't know as it still hasn't been completed) from drought, to negotiation, to drilling, to revenue. Weather patterns experienced today are far too late.
Not really objective reporting...
"In Compliance with SEC Rule 17B Wall Street Newscast was compensated fifty thousand restricted shares for ongoing media coverage."
More fluff and dilution.
No, I don't....If they had something good to say, you can rest assured this new PR firm they hired, payable in shares I'd imagine, would be pushing it to your inbox. No company in the world sits by while they lose 90% of their market value and says nothing. My guess is, the 10K will be very very revealing. Watch for declining Energy Service revenue, and increase in losses for 4Q15.
Sorry, I should have been more specific. I understand the scarcity issue, but I was being company specific.
Water Segment through 9mos ending September 31st:
Revenues $1,330,989
Cost of Rev <$1,106,402>
Opex <$1,296,028>
------------
Segment Loss <$1,071,441>
On the other hand, my point is energy services have carried them so far, and I don't see that continuing.
Revenues $7,362,448
Cost of Rev <$4,674,310>
Opex <$1,545,986>
------------
$1,142,152
To answer why would I "hang around" if I have no shares and don't plan on acquiring any, simply because I've been arguing a point for 6months and feel that I am right, and enjoy debating it and watching it come true. Nothing all that serious about it really.
I'm telling you, water is a net loser. Everyone jumped all over the increase in revenue in 3Q15, but didn't you or someone else allude to it being a one time revenue? And even then, the net loss attributed to water increased proportionately. Pipeline repair and maintenance was the only thing keeping them afloat, and you absolutely have to assume they've taken a beating just like everyone else. No news must be bad news. IMO, they've been sucking what cash they could out in salaries, and issuing stocks to pay the bills. 10K should confirm it, but it does little good to argue until then. Sure you might flip some $.01 shares for $.03, but there is no long term value IMO and I wouldn't want to catch the sharp end of the knife.
No, still has about $.02 to go.
I don't think it's painting anymore. Can someone post the trade history?
Not sure it would take much to get this down to $0.000
There might be some 100% bounces up and down between now and the release of the 10k, but I see now long term real value. Seems like a risky game of catching the falling knife. IMO, they're out of business within a year. No cash.
What happens from here? I have zero experience with penny stocks. I've only been on this board because I thought the $.40 valuations were ridiculous. I'm just curious how companies stay afloat and what investors hope to gain. Do investors buy the dips and sell the peaks profiting on the 25% changes in $.005 price moves? How long does it take before they slip into bankruptcy?
I think we've agreed for a long time the direction it was heading, but I sure didn't think it would be down here this quick. Good call.
I agree, the ramping up of the revenue from water businesses cannot be denied, but the ramping up of losses from water businesses also cannot be denied. I think I made reference to a lemonade stand or may a girl scout cookie stand being more profitable. Please note below.
Water Revenue for 9months ending Sept $1,330,989. That's fantastic and up 660% from the prior year. But....losses from water businesses were <$1,071,441> up from a loss of <$559,769> the previous year. Seems like maybe we would rather them not earn so much money in water?
Simply put, and cannot be denied, water loses money every single quarter. You cannot find a quarter that they did not lose money. I also encourage you to check out the segment (corporate operations)...which lost $6.1m over the first 9months of the year.
I think the "bounce" in stock price was around August. I went back an looked and verified it closed above $.40 exactly 1 day, and was back in the $.20s within 20 days, and has steadily decreased. Some might call that a "dead cat bounce." The financials speak for themselves. To add credibility to my previous assertions, every fact I put out there was found from the 10k, and subsequent 10Qs. Please note below. I'll go ahead and put in the links too.
Direct quotes from 2014 10k.
1.) "During the year ended December 31, 2014, we incurred $635,000 in board and consulting fees with Paul DiFrancesco, a Director."
2.) Paul DiFrancesco shall be employed as Head of Finance for a three year term effective February 1, 2015. His base salary shall be $12,000 monthly ($144,000 annually) during the first year of employment, $16,000 monthly ($192,000 annually) during the second year of employment, and $16,000 monthly ($192,000 annually) during the third year of employment. He will be subject to an annual discretionary bonus up to 100% of his previous six month salary, and a signing bonus of 300,000 shares of the Company’s common stock. He will also be subject to quarterly bonuses equal to 50,000 shares of the Company’s common stock. He will also be subject to a twelve month severance award in the event of termination.
https://www.sec.gov/Archives/edgar/data/1357838/000141588915001239/0001415889-15-001239-index.htm
Quotes from the lates 10Q
"....and that Paul DiFrancesco and Stanley Weiner be issued 2,000,000 shares of the Corporation’s restricted common stock for their efforts on behalf of the Company during 2015."
https://www.sec.gov/Archives/edgar/data/1357838/000141588915003857/stws10q_sep302015.htm
In conclusion, I'm not saying there's absolutely 0 chance for STW to make it. I'm saying by looking at their record, looking at how management is pulling cash out when it is so scarce, and looking at the general overall economy in which they operate, I don't believe it is a likely scenario. I would liken it to putting $100 bet on Rick Perry to win the presidential nomination, is there a chance? Sure, will it happen? Probably not. But, if I was a believer, I guess now would be a good time to gobble up some ownership. Hell you can buy the whole thing for ~$2mil.
Of course there's a glimmer of hope, as there remains some value. All I'm trying to point out, and have been since last year, is it would be wise to temper expectations. I've never thought STW was attractive, mostly because of it's heavy reliance on the Pipeline Repair and Maintenance. The idea, and subsequently the company, was born in the most opportunistic of times, severe drought and energy boom. During that time, they bled cash quarter after quarter. When that changed, they were doomed, and it's very clear by the share price, the market agreed. I honestly believe the executives, whoever it may be, that are running this company, are sucking every bit of cash out of STW, and plan on leaving investors, employees, and business partners left holding the shares. I was really hoping someone would reply to my post yesterday countering my claims against Paul DiFrancesco. What has he done, and more importantly what has the company done, to warrant such generous compensation packages to him?
I really would like to see it work out for you as I believe you are one of the few, very few, who are actively invested in STW. That being said, I've never been here for anything other than debate my opinions of the company. Not a shareholder, and have no plans to become one. Best of luck.
Thanks for the suggestion, but believe me, any news pushed from their "database" that can even be slightly construed as positive, will be posted on this site well before I'm able to check my mail.
In response to your requests for claims. I'm not sure you have to look real hard to see real evidence. The first victims of an energy bust are energy service companies, proven, read the headlines. For STW, I guess I don't have any real firm evidence other than Energy and Construction revenue through the September is down 8%. I don't think we should expect a turnaround for the 4Q15, or 1Q16 for that matter.
I think where some get a little confused here is they are a too caught up in revenue figures. You can make $1m revenue, but if it costs you $2m to earn it, how much are you ahead? I know what got a lot of investors excited was the Water Treatment Services revenue was up 600-700% year over year (I'm recalling that, not calculating it, so it might be off). That's really exciting news for a water reclamation company. They are earning money doing what their supposed to do, which is great when the energy sector is crashing (there is firm evidence of that our there). So why am I still pessimistic? The operating loss for the Water Sector was <$1,071,441> through 3Q15, vs <$559,769> through 3Q14. That goes back to would you rather earn $2 and it cost you $1? Or would you rather earn $2m and it cost you $4m? The girl scout cookie stand down the street is way ahead.
On to Paul DiFrancesco - Please provide hard information that Alan Murphy and Thomas Joiner are running the company? I don't think we have heard anything out of them pointing to that. Quite frankly, I don't expect anyone to claim responsibility for running the company that lost 90% of its market share in 7 months. But, what we can look at is compensation and stock awards. Did you know that in 2014, STW compensated Paul DiFrancesco $635k in Board and Consulting fees? Since we like hard information, I went and researched average salaries for CFOs/directors of finance. According to the Robert Half Salary Guide, 2016 edition (2 years newer than the 10K I'm reading) Paul earned ~40% more than the average CFO of a Large Company (Defined as greater than $500m in annual revenues). Calling STW a large company, and rewarding the finance consultant more than a CFO of a large company is a bit of a stretch. Paul has resigned his positions from Ascendiant Capital Services (where he was a managing director responsible for finding cash for STW) to accept the director of finance position at STW. STW will pay Paul $144k in the first year, goes up a bit after that, award him a 100% bonus of the prior 6 months salary (at the discretion of the compensation committee, which he is director of), a signing bonus of 300k shares, quarterly bonus of 50k shares, oh and on October 9th of this year, awarded him 2 million shares for "his efforts on behalf of the company"...boy that sure is vague isnt it? I am speculating that as the person in charge of securing the capital, and I think we can all agree that that position is by far the most important at this stage in the company's life, who is being paid much more than any other executive, and at this pace will be the largest shareholder before long, is likely "calling the shots."
Again, this is speculation and it is clearly my interpretation by reading 10Qs and 10Ks. I'd like to point out that a $50k investment 7 months ago would today be worth $5k today. The market is clearly agreeing with me.
What's the next step? It's pretty clear this is in Paul DiFrancesco's hands now. I don't have any experience with penny stocks and I'm not sure what happens? Does everyone wait for the 10k, realize he's bled the company of any cash, while paying bills and employees with worthless shares, then walk away and find the next big thing? Not being sarcastic, just seems like this is pretty much over. -0- cash, plummeting revenue, no word from management, are the buzzards circling above?
You have to assume no news is bad news in this situation. No management team is going to sit idly by and watch their market cap plummet 90% in just a few months and sit on their hands. Very simply, if they believe in their future, they would be acquiring the shares themselves. I was on the fence 8-10 months ago, mostly arguing they had a weak balance sheet, but I truly believe Paul Difrancesco is bleeding this thing dry.
No, I have not registered with the company. I figured any positive news would be pushed to this forum immediately. Simply put, my point is if I invested the day of the last conference call with management, I would have lost 90% of my investment over those 7 months. Investors deserve to know why. More importantly, what's the plan to stay afloat? Has any progress been made to secure more investment capital? It's very clear STW is not ready to stand on their own two feet. Who's stepping up to carry the load?
And I have some other questions that some of you may be able to answer. It seems to me that this was a Midland based company founded by Stan, who everyone knows, is from a reputable oil family. The CEO seems to be from west Texas, and we can argue all day long whether or not he's fit to serve as the CEO. I'm not sure exactly what the relationship with the CFO is. I guess he's based in California and has an accounting firm that performs CFO services for different clients? He's not an exclusive STW employee? Why not a Texas based CFO? Paul DiFrancisco, if you research him, has run different investment funds and such based in California. If you try to reach out to him he's in California most of the time, stopping in to Midland from time to time. The accountants for STW are based in Midland. I guess my question is this...did this begin as a Midland, TX based company and did Paul DiFrancisco hijack it? What relationship does a water reclamation and energy pipeline repair and maintenance company have with southern California? Stan is no longer serving CEO, all inquiries are directed to Paul, who's likely in California? I know I've read on here some projects in California and I realize their water situation, but isn't the core water projects centered around small towns in the Permian? It just seems like a very odd arrangement and I worry about someone like Paul DiFrancisco collecting his $200k as investment director or whatever he is, while serving as director. He also received 2 million shares for his services in 2015. This is sounding more and more like his company, and I'm not sure he's as interested in water reclamation as he is in bleeding STW dry.
I can agree there may be some continuing revenue but I would be SHOCKED to see growing. I would imagine with the company in the shape they're in they would be screaming from the rooftops any new contracts they secure. We haven't heard a peep from management. If I was management and believed in my company, you can be assured I'd be gobbling up as many shares as I could at $.03. I'm afraid they've given up.
You're exactly right, but how long do suppliers and employees accept $.05 shares in lieu of payment? Here is my prediction... and it'll ruffle some feathers but it's a prediction only. I've seen STW Pipeline pickups floating around Midland, therefor I know there are very real employees and real assets involved. STW Pipeline will swing to a loss in the 4Q2015 and no longer provide the crutch for water. STW Holding will either spin off or dissolve STW PL due to the fixed costs associated. This leaves STW Water all alone to stand on it's own two feet. As I've mentioned before, conversation at the lunch and dinner has not revolved around water in over a year...despite what others have said, it's not in the forefront of local citizen's minds. Promise. Whether that warranted or not, doesn't really matter. Budgets are strapped, investment is tight, and nobody is giving companies like this a second look. The only ones I would imagine investing anything investors who already have skin in the game.
It speaks volumes that management has not stepped forward to stop the bleeding. As the PPS has plunged ~90% in 6 months, not one insider has shown any degree of confidence by stepping up and buying shares. I don't honestly believe it's a scam, but I think the insiders realize it's a pipe dream (pun intended) at this point. At the very least they could put together a conference call and butter up some of the faithful. Cash is what's going to kill this company. We won't know exactly how bad it is until the next 10k, which I presume will be filed untimely once again, but without the pipeline repair and maintenance revenue, the hole will only get deeper. The only noise being emitted by the company is fluff PR articles with a disclaimer at the bottom noting the author received 5,000 shares for posting (further dilution). I think management at this point is drawing paychecks (Paul DiFrancesco - $192,000/year, Grant Seabolt - $114,000/year as a contractor nonetheless) and I assume the well qualified CEO in his first big time gig is earning somewhere around what Stanley Weiner was ($200+K). And look, I understand talent costs money, but as I see it, this isn't a well established cash generating entity and this lineup of all-stars isn't earning their keep. They're also well compensated in ESOPs. I honestly believe management and others think it's over and are pulling every last penny they can before it tanks. I'm expecting a very very very poor 10K, whenever we might see it.
On June 17, 2014, the Company’s board of directors approved a motion to employ Kendall Williams as controller at an annual salary of $165,000, plus a signing bonus of 200,000 shares of the Company’s common stock plus 800,000 options pursuant to the ESOP.
https://www.linkedin.com/in/kendallwilliams2
Below is your new controller according to Paul DiFrancesco..
https://www.linkedin.com/in/sanjeev-paudel-a87a1885
You'll get a lot more DD done in an afternoon at the Petroleum Club in Midland than you will drinking Prudent's koolaid.
Oh, and note those shares paid an employee who served just over a year, there's your dilution. I'm betting just about every current and former employee was paid in stock. Too bad the good ones realize it's not worth the paper it's printed on.
And you're a moderator, start acting like it.
Neat...How many companies has he managed? How did designing, building, installing, commissioning, and maintaining those services prepare him for cash flow management?
I don't put much stock in company provided bios. For one thing, it looks like Alan Murphy's most distinguished line item on his resume is being a "Level 3 Water Treatment Specialist". Sounds really neat. Look up the requirements and you can become on with a high school diploma and 3 years experience and paying a $111 fee, or with an associates degree and 2 years experience, or finally a bachelors degree and 1 year. Point being it's not quite the rigorous process as other certifications/licenses (CFA, CPA, JD...etc) May be qualified to work in the field or consult, certainly don't see anything in the resume qualifying him to serve as chief executive...
Prudent investors are loading up down here.... expecting big increase in cash to keep this train rolling next 10Q....gonna pop any day now....only the ill-guided are selling down here....smooth sailing ahead boys
It's a coiled spring ready to pop any day now.
Well put. Pun intended.
Very important information. What pipeline construction are they involved in? Once you get back to me we'll delve a little deeper into the economics of pipeline construction in the Permian. I personally haven't see or heard of any backlogs...and as companies are operating on barebone budgets, repairs on aging lines are pretty much on a must need to survive basis.
Revenues are great, but cash flow should be your foremost concern. Without it, you don't make it to the next quarter. I really think the outstanding issue with delinquent sales and payroll taxes is under appreciated. They're borrowing from everyone, including the government, to keep plodding along. With G&A doubling your gross profit, you're going to be operating at a deficit for a long time, unless you nail down some real contracts, that pay out fast. Problem is who wants to sign lengthy contracts with a company that they doubt will be here next year. Two things Alan and the others need to do immediately, 1.) put together a call to address immediate concerns and 2.) BUY some company stock at $.07 and show a little faith that THEY believe it's undervalued...
Agreed... $671k in overdraft, no cash... Credit markets for companies operating in metropolitan areas where more than 50% of economic activity is energy related is all but dried up. Permian Basin activity has been a little more resilient due to large companies turning focus away from Bakken and EF in South Texas, but at a sustained price of $40-$50, Permian activity will fade as well. Not sure exactly what energy construction business STW is involved in, but you have to assume the activity will continue to fall. I think the assumption is STW will become a stand alone water treatment company within the next couple of years, and with the recent El Nino weather patterns and the wettest year in the area since probably 2010, I think interest is drying up. Cant see a whole lot from the 10Q, and without a management call, you can draw all kinds of assumptions. Bottom line from an outsider looking in is they'll never make it without additional funding, and they're not likely to get it. BTW, still don't like the outstanding sales and payroll tax liability creeping up?
C'mon, this has been a great opportunity to accumulate some shares down at this level. Smart money is loading up. 3Q will be out later this week with higher water revenues and increased margins... ;-j
Please educate us on why else he would be filing a 144???
From the SEC:
This Form must be filed with the SEC by an affiliate of the issuer as a notice of the proposed sale of securities in reliance on Rule 144, when the amount to be sold under Rule 144 by the affiliate during any three-month period exceeds 5,000 shares or units or has an aggregate sales price in excess of $50,000. A person filing a Form 144 must have a bona fide intention to sell the securities referred to in the Form within a reasonable time after the filing of the Form.
Unless I suppose you're suggesting he's anticipating a spike in the price and wants the ability to quickly sell. Either way, we'll find out soon enough....