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INTERNATIONAL FOAM SOLUTIONS --- IFOS
Penny Paradise has selected International Foam Solutions (IFOS) as its newest pick. Penny Paradise feels that IFOS is poised for explosive revenue and profit growth. Rarely do companies with this type of potential appear in the stock market, especially on the over-the-counter bulletin board.
Company name: International Foam Solutions
Exchange: OTC Bulletin Board
Approx. Shares O/S: 8,600,000
Approx. Float: 700,000
CEO: Mr. Harvey Katz
Auditor: B.D.O. Seidman (Nation's 5th Largest)
1999 Revenue Estimates: $9,000,000 (CONSERVATIVE)
2000 Revenue Estimates: $15,000,000 (CONSERVATIVE)
1999 Net Income Estimates: $2,700,000 (CONSERVATIVE)
2000 Net Income Estimates: $4,500,000 (CONSERVATIVE)
Stock Price: 7/16 by 3/4
Company Overview:
International Foam Solutions has recently emerged from R&D, and is just beginning to enter the mature phase of its business. International Foam Solutions (IFOS) has developed a solution to a huge business and environmental problem: Styrofoam (or polystyrene). Styrofoam is a fantastic packaging substance. . . however, due to its non-biodegradability, there are huge environmental and monetary costs associated with its disposal. With IFOS' patented technology, these problems need no longer trouble the world.
International Foam Solutions has a multi-step solution to the problems associated with Styrofoam. Most importantly, it has a chemical solution which, when applied to Styrofoam, converts the Styrofoam to a jelly like substance which takes up 10% of the space of Styrofoam. This chemical solution is protected by patents in the United States, and in 29 other countries.
In addition, IFOS has patented equipment that is used to shred the Styrofoam and apply the chemical solution.
This by itself is an explosive set of technologies; Styrofoam is inexpensively reduced to 90% of its volume, reducing transportation, landfill, and environmental costs drastically.
However, the above mentioned items are only the beginning of International Foam Solutions' wonders. The key to IFOS' success lies in the jelly-like substance (which the chemicals transform the Styrofoam into). IFOS has patented technology that transforms this jelly into a clear, solid plastic. This plastic can be used in the manufacturing of a multitude of items, and has a market value of 35-41 cents per pound!!!!! Not only does IFOS eliminate the problems associated with Styrofoam, but also it creates a value-added product in the process!!!
Profit margins are tremendous: about 20% on the shredding machinery, and 300% on the chemical solution. This can be compared to the marketing strategy of Gillette: sell the razors just above cost, but charge an arm and a leg for the shaving cream!!!
IFOS' two business procedures:
A) (Primarily Domestically): IFOS sells the shredding equipment and the chemicals to its clients. The client company transforms the Styrofoam into the jelly substance. Then, this jelly is shipped to IFOS' recycling plant in Florida, where the jelly is turned into plastic.
B) (Primarily Internationally): Same as above, except: IFOS also sells the right for its client to build its own recycling plant(s).
Current Clients:
· StyroJapan: IFOS currently has a contract with StyroJapan, a Japanese corporation. IFOS gains revenue from sales of its chemical solution and shredders, and also has received a $1,000,000 payment for Styrofoam's right to build its own manufacturing plant. StyroJapan anticipates having 22 such plants by 2000. Revenues of $19,800,000 possible in 2000.
· Greece (affiliate of Onassis Group): Will be valued at approx. $800,000 for 1999.
· Columbia Hospital: Eventually will apply to 522 separate hospitals
· Arco: recently finalized
· MBNA: another recent addition (the credit card company)
· Pending: Negotiating with a major school district and a few universities and other companies.
· Potential: Virtually endless possibilities for expansion, including possible military applications. (Every shell includes a polystyrene casing).
The Stock:
I think most of you will agree that the company sounds terrific. The stock suffers from one slight drawback. . . a significant spread. The spread was part of the reason that this pick has been delayed. . . at one point, the spread was .06 by 1.50. Another market maker has since come aboard, and has helped narrow the spread significantly.
This spread will not be a hindrance much longer. For one thing, several more market makers will begin to come aboard, some as soon as this week perhaps.
Also, as volume enters the stock, the spread will narrow. There are several events that will be bringing volume into the stock. . . in the next couple of weeks, several major market radio programs will be aired. I addition, Investor's Weekly, a television program, will be aired in the second week of November. Also, the company has never before issued a press release. . . several releases are prepared, and the first may be issued this week. IFOS has a lot of news to tell the world about, and is about to begin doing so.
In addition, this stock seemingly has nowehere to go but up. . . the float is quite small, 700,000 to be exact. Moreover, these 700,000 shares were all issued in 1996 at $1.50. . . there is little danger that selling will enter the picture until the $2-$3 range, IMO.
In conclusion, IFOS is a wonderful company with a bright future. The investment community is about to be made aware of them in a very big way. Volatility will likely be prevalent in the short-term, but I firmly believe that shareholders will be very, very happy.
Good Luck,
Patrick of Penny Paradise
PennyParadise@lycosmail.com
DISCLAIMER:
This is not a solicitation to buy or sell the aforementioned securities. The writer of Penny Paradise, Patrick Gundlach, is not a registered investment adviser. The writer may buy or sell shares of the company periodically on the open market. The writer has been retained by the company as investor relations counsel for a period of three months, and will be compensated with fifty thousand shares of common stock. Opinions are those of the writer and should not be used as sole criteria for investing. Reviews of companies are not a complete analysis. All information used in Penny Paradise is from sources believed to be reliable, but cannot be guaranteed. Invest in stocks only after reviewing the financial reports of the company (if available) and as always, investors beware! Thank you, and best of wishes to all. |
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