GNOLF fundamentals = rare gem of a play
I hold two stocks right now, MMAM and GNOLF, neither of which have their own boards on Raging Bull, so I just HAVE to post the following someplace. So here goes.
And you can check my basic facts here for yourself about Gen Oil specifically (GNOLF.ob), but I swear the following is all true!
Gen OIl has announced a memorandum of understanding to build a 30,000 BARREL (not just gallon) per day, heavy-oil-to-light-synthetic-oil converter in China. According to Gen Oil's CEO in his very recent Wall Street dot net interview, for each barrel of oil that the company converts to light oil using their green friendly hydrogen adding technology, they make 20 bucks in revenue. What makes GNOLF's technology so desirable is unlike the previous converter technologies, GNOLF's does not require oil producers to just throw away the 5-10 percent of the heaviest oil they harvest, known as "pitch," because GNOLF's able to convert that stuff too, and by ADDING hydrogen to the base oil, they are actually able to come away with MORE oil than what they started the conversion process with. Which is why GNOLF's CEO is quoted in the before-mentioned online interview saying "the bids are coming in so fast (for similar Gen Oil converter plants to be built) all over the world that GenOIl's salesmen are running all over the place having a hard time keeping up with the interest and demand and taking bids.
But check this math -- considering JUST the China, 30K barrel per day converter. Even if GNOLF didn't sign another contract for a converter anywhere else in the world (which is HIGHLY unlikely given the major interest in their technology right now): $20 times 30K barrels per day equals $600,000 revenue per day! (The profit margin by the way is extremely high, again according to the CEO in the Wall Street online interview.)That amounts to (60,000 x 365 days) $219 million bucks in revenue for the year. With the high profit margin per barrel, let's say the company lists half of it as net income: That's over $100 million per/yr net income from just the ONE factory in China, or .52 share (190 M shares outstanding) net income. At a PE of 10, it's a $5 stock, or at a 20 PE it's a $10 stock. (China is expected to grow its oil output six percent per year, so let's gravitate toward the PE of 20 or higher). But on top of China Genoil is expecting to start signing contracts to build similar converter plants around the globe. This all adds up to why this "penny" stock is generating MILLIONS of dollars worth of trading volume per day here at the just-under $1 level and why YOU GOTTA LAUGH at the idea of selling a single share for less than five bucks, unless you are just doing the timing/flipping thing to make a couple bucks here and there -- nothing wrong with that. But the bottom line is you don't want to be out of this stock for more than two or three days during a natural dip in the ascending staircase. GNOLF has tremendous legs right now, see how it's been acting. Check the price, volume and chart and you'll see what I am talking about.
My short-term price target is five bucks -- but that's in the total ABSENCE of any more press releases in that time. If there is even a sniff of a smiliar plant in europe or elsewhere the $5 bet is off in favor of higher ground.
Pleasant dreams here in the wee hours for me... I am tapped out portfolio wise, having spent all my ammo on getting into GNOLF at .73 a few days back after doing the research above. And just chucking it out there for any interested members of this board, which I really like, for whoever wants to go along for the nice ride with me! I have not felt this good about a stock pick since I bought SUWN on Dec. 27 at .24.
