This was forwarded by a friend to my E-mail. If there is a copyright problem with posting it here I hope the good folk at SI will take it down.
Does the following sound familiar to anyone on this board?
Thomas Loyd
Loyd Financial Consulting
11111 Katy Freeway, Suite 910
Houston Texas 77079
Phone: 800-398-5725 Fax: 713-973-5783
Issue 303, July, 1999
STRONG BUY/ UPDATE
CREATIVE RECYCLING TECHNOLOGIES, INC.
(OTC BB: CRTZ)
We share in the happiness that investors who followed our last recommendation have enjoyed. HumaTech (OTC BB: HUMT ) which soared from $1.00 to over $5.00 in only two weeks.
Now, we want to recommend another stock, which we feel, has a lot of upside, both near and long-term. It is Creative Recycling Technologies (OTC BB: CRTZ). CRTZ is a development stage company, which has a proprietary and patentable technology with which to recycle scrap tires. We at Investors' Alert are putting a 6-month target price of $5.75 on CRTZ and a three-year target of $22.00.
One of the biggest environmental liabilities we face today is discarded automobile tires. Tires are built to be practically indestructible, to withstand the stress and heat of driving thousands and thousands of miles. Because of this durability they are an environmental nightmare.
These tires can cause more environmental destruction than some of our worst disasters in history. Tires are stock piled at storage facilities around the world and can catch fire. Tires burn extremely hot, are almost impossible to extinguish, emit extreme pollutants in the air and release oils onto the ground that cause even further environmental damage. In fact, in 1983 in Virginia, a 7,000,000-tire fire burned for nine months and in Canada a 15,000,000-tire fire burned for months. A Green Peace environmentalist stated; "The Canadian fire released more oil than the Exxon Valdez did."
This is indeed a serious problem when you look at the number of tires that have been discarded over decades and even more disturbing is the number of tires that are being discarded every year. The cumulative total of officially reported scrap tires at "state certified sites" is around 3 billion. However, vast numbers of additional tires are stored on other sites, either legal or illegal and it is believed the total is closer to 6 billion. Creative Recycling Technologies has a patented process using microwave technology called Pyrolysis which cleanly breaks tires down into useable by-products. According to a press release dated June 9, 1998, the by-products will yield $4.55 per tire on a conservative basis, the most valuable by-product being the Carbon Black which has an approximate $15 billion annual market.
CRTZ is building 10 plants worldwide and has already been contacted by Saudi Arabia, India, Belgium, and Finland. The first plant will be built here in the U.S. in southern New Jersey, and has received a letter of cooperation from the state and because the facility will be located in a designated State of New Jersey Enterprise Zone, the state and other authorities will finance up to 80%. CRTZ should have 1 plant up and running this year and 2 plants up and running by next year. We believe there will be an announcement very shortly about funding the first plant. Each plant can recycle 10 million tires per year. CRTZ will receive its revenues from licensing fees, management fees and a share of the plant profits. These revenues to CRTZ will be 25% of the plants total revenues.
Next years projections for CRTZ as follows:
First full year of operation. With 2 plants running:
15 million tires recycled $4.55/tire= $68,250,000
Plants Revenue - $68,250,000
CRTZ Revenue - $17,062,500
Less Expenses - ($5,400,000)
Net Income
Before Tax - $11,662,500
After Tax - $7,230,750
Per Share - $0.86 after tax
At a conservative 15 P/E this stock could trade over $13.00 by next year. And CRTZ will be adding approximately 1 to 2 new plants per year for the next five years, so add approximately $1.00 after tax net for every year.
On the near-term stock price outlook front, several important factors are noteworthy: (l) CRTZ appears poised for a short-term run-up. The stock has been base-building in the $1.25 area recently, after bolting earlier in 1999 from about $.50 to $2.50 (briefly) and then falling to the $1.00 area (briefly); (2) a short squeeze seems possible, to some degree. We believe a short position of some 300,000 shares has been created within the past month.
Investors' Alert is an independent research firm with paid subscribers. Investors' Alert is not affiliated with Creative Recycling Technologies. Subscriptions are $139.00/year for Investors' Alert newsletter service. This report is based on Investors' Alert independent analysis but relies on information supplied by sources believed to be reliable. Thomas Loyd has purchased 23,000 shares of Creative Recycling Technologies over the past 9 days. The information contained in this report is not intended to be, and shall not constitute, an offer to sell nor solicitation of any offer to buy any security. Copyright c 1999 Loyd Financial Consulting. All rights reserved. |
