Stockprowler picks CMMI for November 2007
Positive Third Party Opinion on CMMI!
Several weeks ago Stockprowler added DPDW to the top of the Watch Box list. At that time DPDW was trading in the 80 cent range. It has since topped the $2.00 mark. Deep Down, Inc. (OTC BB:DPDW) is an oil services company with an impressive client list. Its innovative and proprietary technology coupled with an aggressive growth strategy make this a stock to buy and hold long term in our opinion.
Stockprowler's pick for November is another oil sector stock, CMMI, trading at around 18 cents. This past March, CMMI effectively cleared the way for the company to commence full-scale operations and begin execution of its new business operating plan and acquisition strategy. A bulk fuel terminal adjacent to Houston's George Bush Intercontinental Airport was leased by CMMI's wholly owned subsidiary, Intercontinental Fuels, LLC and immediately began generating revenues through operations of its three-bay fuel blending and tanker-truck loading terminal. The terminal has 160,000 barrels of fuel storage capacity, on-property access to most major fuel transmission pipelines, easy interstate access, and close proximity to Houston's large oil and gas refineries. With main transmission lines direct from area refineries providing on-site access to kerosene, jet fuel, gasoline, and diesel fuel, the company has an enormous potential for high throughput and growth.
In addition, the company has begun distributing pure biodiesel (B-100) and B-20, a 20% blend of biodiesel with petroleum based diesel fuel, and intends to benefit from growing consumer demand and the enormous government mandated tax benefits encouraging its widespread use.
Biodiesel is a domestic, renewable fuel for diesel engines derived from natural oils like soybean oil, meeting ASTM D 6751 specifications. Biodiesel can be used in any concentration with petroleum based diesel fuel in existing diesel engines with little or no modification, and is produced by a chemical process that removes glycerin from the oil.
Total revenue reported for the quarter ending June 30, 2007was $538,676. Timothy G. Byrd, Sr., CMMI's chief executive officer stated, "In examination of our results, excluding the one-time accounting charge of $717,412, I am pleased to report in our first quarter of operations the terminal operations have been cash-flow positive, with month-over-month growth averaging 30% per month. I anticipate growth continuing in subsequent periods."
"Since the addition of several large customers this year, including ADA Resources and O'Rourke Petroleum, our customer base continues to grow. Just as significant, after bringing on-line our B-100 blending apparatus, the company has increased its profit leveraging the B-20 biodiesel supplier market. I expect this performance to keep pace with the growing nationwide demand for diesel and "green" fuels.
The company's vision going forward includes expansion through maximizing profits at all the various distribution points, from the refinery to the retail outlet, within the growing 'downstream' consumer and commercial fuel distribution chain. In addition, the company intends to serve the vast unbranded retail fuel outlet market offering CMMI's branded fuel business concept, including availability of alternative, or green-fuels and renewable fuel blends." Byrd concluded.
On Monday, October 29 CMMI announced execution of a purchase agreement to acquire Troutman Oil Company, Inc., and US Fuel International, Inc., both privately held companies, with headquarters in Arkansas. Timothy G. Byrd, Sr. stated, "The addition of Troutman's distribution infrastructure, retail network, and the US Fuel® brand to our current terminal operation moves us closer to establishing CMMI as a fully integrated fuel supplier, distributor, and retailer, and positions us to capture profits throughout the downstream chain. We are presently continuing to develop and expand this business model through both organic growth and by acquisitions of greater terminal capacity and increased geographical reach of branded retail fuel outlets within the consumer and commercial fuel distribution chains." Terms of the agreement have CMMI purchasing the stock of Troutman Oil Company Inc., US Fuel International Inc., and certain assets held individually by its shareholders for $5 million in cash, $900,000 in debt, and 666,680 shares of CMMI convertible preferred stock valued at $1,000,000. The final purchase price is subject to adjustment based upon the audit results of the companies' assets and liabilities. "Once completed, this acquisition is expected add over $23,500,000 to the company's revenue," Byrd concluded.
Troutman Oil distributes fuel to retail outlets throughout Arkansas and owns and operates 12 branded US Fuel stations in the mid-South. US Fuel is a fuel marketing company that sells fuel under the US Fuel® trademark. US Fuel currently has a private label US Fuel brand credit card program with over 3000 active cards establishing brand loyalty with its customer base.
Closing of the purchase is to occur on December 10, 2007, but can be extended up to 90 days.
Well, all right, that's it for now… place your bets, sit back and relax. Remember, this is speculation not investing and quite often we get rewarded BIG for taking a chance…
Stockprowler.com does not receive compensation from companies we profile or from third parties... we never have and never will. We use our own money when we buy stocks, and even though we usually take a position in a stock before we profile a company, our purchases are small relative to the public float so that the effect on the stock price when we buy or sell is minimal. Please read our full disclaimer.
Also, contrary to a commonly held belief, Stockprowler does not have access to insider information, nor do we want to because trading on insider information is illegal! All information contained in our reports is available in the public record... and any written or verbal communication with company CEOs/IR people strictly adheres to this rule.
