The Kostech SmallCap Research Group on October 2nd produced a
bulletin on CEC Industries (www.kostech.com). In a word this group
(which I personally have followed and respect) is focussed on
locating high-growth publicly traded companies for under $10 per
share. They do not accept funds or compensation for the companies
they review. The most recent edition to their group is Mike Graham
(formerly of Dean Witter Reynolds), Kostech's new Director of
Research. The directors of Kostech have over 30 years of combined
market experience.
Kostech Research Bulletin for 10-02-96
C.E.C. Industries Corp. (OTC:BB:CECN) signed a letter of intent to
acquire all common outstanding of Cybernetic Services Inc.
(OTC:BB:SRDO) Last month. If this merger goes through it will add
another revenue producing asset to the already impressive list of
assets of CECN. Cybernetic, d/b/a Silent Radio, is an electronic
publishing company providing content and network services for the
information services industry. Cybernetic Services has undergone
changes which are expected to transform it into a profitable entity
by the first quarter of 1997 as there are many negotiations for new
contracts underway. The transaction is expected to be completed as
soon as next week.
CEC Industries (OTC:BB:CECN) is a company with fantastic possibilities
for growth and profit. It was taken over in April of this year by
Gerald Levine who has succeeded in diversifying the company's
holdings in markets that are in clear demand today along with the
future. As a sign to their good fortunes, CEC has just recently
filed a 10-K with NASDAQ to upgrade their listing. All of the
strenuous conditions have been met, and this upgrade should happen
in the near future. This will mean greater exposure to the company
along with an increase in market makers who must hold inventories
which drive up demand.
CEC has had a few notable acquisitions in the recent months that may
prove to be golden. One of which was Auto Express (it is responsible
for transporting vehicles across the United States for businesses as
well as consumers.). They currently have contracts with the three
major auto makers in the U.S. along with Mayflower, United Van Lines
and almost all of the professional sports organizations in the
country. They are ahead of their current revenue projections with
actual revenues of 1995 being $1.8 million which was %165 increase
over 1994. Estimated revenues for 1996 are $3 million.
The company also has three, key, real estate holdings. The first
is some undeveloped land, in Las Vegas, with a market value of
$3.8 to $4.2 million (this is based off of the market price of
the area.). This land is currently being negotiated for sale or
development. The next piece is property in Alabama which holds 31
billion cubic feet of methane gas. The value of this land keeps
increasing as the price of methane gas is on the rise. The golden
child of CEC's real estate holdings is a 9000 acre piece in
Tennessee. This land sits above 52 million tons of low sulfur,
high quality, coal, with 37 million tons of it being surface coal.
After speaking with some of the company's key personnel, it has been
conveyed to us that there has been a recent rejection of a $93
million offer. There have also been other more promising
negotiations that should be concluded in the near future.
CECN last traded at .53
CONTACT: Gerald Levine C.E.C. Industries Corp. 702-893-4747
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