MOMENTUM & GROWTHService Team Inc (OTCMKTS:SVTE) Is A Small Cap Opportunity
Posted on November 27, 2017
Today, we are going to talk once again about Service Team Inc (OTCMKTS:SVTE), which is focused on the manufacturing, maintenance, and repair of truck bodies.
Company Logo from http://www.serviceteaminc.net
The amount of shares that changed hands recently is astonishing.
Have a look at it:
1 year chart for Service Team Inc OTCMKTS:SVTE
What’s going on?
Different good announcements were made since our previous piece was released regarding this company. We believe that the most interesting is the 10% stake communicated by TANGIERS INVESTMENT GROUP, LLC, which may explain the recent large stock volume.
But, there is more.
The company released the important information regarding last two quarters, which seem to have interested market participants as well.
We will assess all these new announcements in this new piece. But, first of all let’s revisit the business model of SVTE. The company “manufactures commercial truck bodies primarily for transporting frozen or refrigerated food products.”
It is headquartered in California and was founded in 2011.
On July 10, 2017, TANGIERS INVESTMENT GROUP, LLC, the market participant, noted that it had acquired a stake equal to 10% of the total outstanding shares of the company.
9.99% stake in Service Team Inc OTCMKTS:SVTE
This stake may have created expectations in the market. In addition, it may be creating an increase in demand for the stock. You know how this works; some people buy big stakes and other market participants follow the same path and buy more shares. This could explain the large amount of shares that changed hands recently.
What is the interest of this market participant?
We could read the following from the filing:
“By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.” Source
We can conclude two things from this text. First of all, the market participants do not want to change the management. We believe that they are happy with their work.
Additionally, it means that TANGIERS INVESTMENT GROUP, LLC, is buying because it believes that the company is an interesting investment.
The new financial figures released.
On July 14, 2016, the new financial statements exhibited that the company was doing really well. It returned positive net income for this quarter, while it was negative in 2016.
How did they achieve these results?
The company seems to be reducing General & Administrative Expenses, which we appreciate. Have a look at the income statement:
Quarterly Report from Service Team Inc OTCMKTS:SVTE
But, that’s not all.
On November 20, 2017, the company released new financial statements for fiscal year ending August 31, 2017, which made the market react.
The sales reported went up to $3,673,622 for the fiscal year ending August 31, 2017. In 2016, the sales reported were lower; $3,030,734. Thus, the company reported 21% increase in sales, which shows that the company is growing at an outstanding pace.
Additionally, many corporate changes were noted. SVTE seems to be transforming itself. It was released that the company had been approved by the Depository Trust Corporation to use the DWAC computerized stock certificate issuance. In our opinion, it will help the company obtain more financing. It is a great news. Finally, Federal Investment Regulatory Agency (FINRA) approved the company’s requested change of domicile from Nevada to Wyoming.
There is more.
For those who appreciate studying quarterly reports, the company released in the same press release that it had a “backlog of orders for more than two months’ production.” Thus, we believe that the next financial statements will show an increase in the account receivables as well as an increase in revenues.
Share Stats – Low Float Runner
We have many readers that appreciate market volatility plays. Check the following stats:
Authorized Shares74,000,000a/o May 31, 2015Outstanding Shares1,069,130,673a/o Jul 10, 2017-RestrictedNot Available-UnrestrictedNot AvailableHeld at DTCNot AvailableFloat560,000a/o May 31, 2015
What did we see?
The amount of shares owned by the public, which is the float, is very low. This means that market orders could make the share price react astonishingly. Thus, share price volatility may be very large.
Currently trading with a market cap of $0.2 million, SVTE is an exciting story among small caps. With $0.3 million in cash, $0.6 million in total assets and $0.54 million in total assets, the net asset per share is positive, which is another feature that the market should appreciate.
To conclude, we expect that the stock will pay off in the near future.
We will be updating our subscribers as soon as we know more. For the latest updates on SVTE, sign up below!
Image courtesy of Ron Mader via Flickr
Disclosure: We have no position in SVTE and have not been compensated for this article.
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RELATED ITEMS:OTCMKTS:SVTE, PENNY STOCKS, SERVICE TEAM INC, SVTE
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ENERGYCleantech Solutions International Inc (NASDAQ:CLNT) Set To Climb Higher
Posted on November 27, 2017
In our last article about Cleantech Solutions International Inc (NASDAQ:CLNT), we noted that a new agreement had been signed with Inspirit Studio, which had made the share price spike up. In addition, we remarked that the company had exhibited a strong financial situation with a lot of cash, properties, and little liabilities.
For all these reasons, we recommended readers to follow the company very closely.
We were not wrong in saying so.
Great announcements have been released. A new agreement with Shenzhen Xinsheng NewEnergy, lithium-ion aluminum case batteries manufacturer, has been signed. The Q3 2017 results have been released as well as a conditional share swap agreement with Marvel Finance to acquire Marvel’s 51% interest in Integrated Media Technology Limited – Ordinary Shares (NASDAQ:IMTE).
The market has reacted to all these good announcements. Have a look at it:
1 month chart for CLNT
For those who don’t know CLNT, its main activity is the “manufacturing of metal components and assemblies used in clean technology, manufacturing industries, textile dyeing, and finishing machines.” The following divisions form part of the company: Dyeing and Finishing Equipment, Forged Rolled Rings and Related Components, and Petroleum and Chemical Equipment.
Image from the website of Cleantech Solutions International Inc NASDAQ:CLNT
On November 7, 2017, the company announced that its subsidiary “EC Power (Global) Technology Limited” had signed a Memorandum of Understanding with the shareholders of Shenzhen Xinsheng NewEnergy about a potential acquisition by EC Power of not less than 51% of Xinsheng.
We believe that the fact that the acquisition is not 100% sure made the market not react to the announcement. It makes a lot of sense. Also, from now on, we will need to very alert at Shenzhen Xinsheng NewEnergy. If the company finally acquires a large stake, the amount of assets of CLNT would increase and its growth would also increase. Such an event could make the share price increase.
This target company is not small. It designs and manufactures lithium-ion aluminum case batteries for mobile phones. It has been doing it since 2008 and can produce 300,000 units a day. Parkson Yip, COO of Cleantech Solutions, explained that with the transaction, new know-how could be acquired. Additionally, he noted that the smartphone industry is growing at a faster pace. This is what you need to read:
“The worldwide mobile phone users expected to grow from 4.8 billion in 2017 to over 5.0 billion in 2019 and we expect demand for on-the-go mobile phone charging to remain strong. We are impressed with Xinsheng’s production capabilities, advanced technology, and quality control processes. With quality and safety being top-of-mind for today’s mobile phone users, having control over the production of the chargers will allow us to confidently deliver products to the market. “ Source
On November 14, 2017, CLNT released its financial results for three months ended September 30, 2017. We continue to believe that what’s driving the attention of market participants is the balance sheet:
Cash: $6 millionTotal assets: $73 millionLong Term Debt: $0 millionTotal liabilities: $6 million
On November 22, 2017, the company released that its subsidiary “Vantage Ultimate Limited” had signed a conditional share swap agreement with Marvel Finance to acquire Marvel’s 51% interest in Integrated Media Technology Limited – Ordinary Shares (NASDAQ:IMTE).
The reaction of the market on this announcement was very significant. The share price spiked from $4 to hit the $12 share price level.
After the spike, the share price declined back to $6, as it seems that market participants sold shares to profit from the move. Some of them should have made triple digit returns in a short period of time. Not bad!
Have a look and remark the large amount of shares that changed hands; more than 5 million on the 22nd.
1 month chart for CLNT
We believe that the market celebrated the terms of the new contract, which seem to be very beneficial for the company. The company may acquire 51% of the issued share capital of IMT (which is valued at US$13,482,410 based on 1,348,241 ordinary voting shares at a price of US$10.00 per IMT share) by paying 19.5% of the total outstanding shares of CLNT, and a 5-year interest-free promissory note.
On the top of it, it seems that the company will have access to the expertise in management systems and 3D autostereoscopic displays of Dr. Herbert Ying Chiu Lee, Founder and CEO of IMT.
We encourage readers to follow this deal closely, as it is not closed yet. The agreement is subject to several conditions including legal and financial due diligence. It can be an opportunity if we follow the transaction closely.
Currently trading with a market cap of $13 million, CLNT is an exciting story among small caps. We continue to see that the company has several catalysts that could make the share price run.
But, there is more.