I haven't bought any stock yet! I was not able to get hold of the PR
for Keystone on Friday.
I would of like to find out what drove this company down last week.
It held up just fine when the market when for a noise dive, two or three
Mondays ago.
I request an investor package.
Here's the write up by Future Stock for Nov. 97
------------------------------------------------------------------------------------------------------------
November Stock Pick--If you had invested in MCI or Sprint when they went
public you would have made a significant return on your investment. We
believe that our November Stock Pick offers investors similar
potential. At one time both MCI and Sprint were trading at $5 per
share. Both stocks have appreciated for a return of over 1000% to their investors.
The Future Superstock feels that it has identified a Company whose sales and profits will explode exponentially over the next 3 to 6 months. We expect its stock price to do the same as the Company's sales force begins their major push into the marketplace over the next two weeks.
The deregulation of the telecommunications industry provided massive
financial opportunities for companies that were prepared to enter the
industry. Approximately two years ago the federal government began to consider the deregulation of the $200 billion electric utility
industry. On August 31st, 1996, the California Legislature unanimously
passed AB 1890, the definitive bill to restructure the states electric
utility industry. On January 1st 1998, the electric utility industry in
California becomes free game just as the telecommunications industry
became free game. To our knowledge there is only one public Company that is set up to take advantage of this massive opportunity. The name of the Company is Keystone Energy Services, Inc. Keystone Energy trades on the NASDAQ BB market under the ticker symbol KESE. On Friday, October 24th, Keystone Energy closed at $4.97 per share.
Keystone Energy Services, Inc. was incorporated in 1994 and is located
in Los Angeles, California. The Company began trading on the NASDAQ BB
market late last month as a newly listed public company. Keystone
Energy's business is very simple and we will get into that in the next
paragraph. First it is important to understand what the deregulation of
the electric utility industry actually means, especially in California,
where Keystone is initially focusing its efforts. Beginning January 1,
1998, all customer classes including residential, commercial and
industrial will be able to purchase their current electricity from
either their current utility or any other licensed electricity
supplier. Current electric rates in California are 30% to 50% higher
than the national average. At this point Californians spend $22.5
billion per year on their electric bills. The government has granted
licenses to companies including Keystone Energy who will sell
electricity at a discounted rate to gain a share of the electric utility
market. If Keystone Energy were able to gain only a 1% market share in
California, this would represent over $200 million in revenue to the
Company. The Company anticipates that it will gain at least a 1% market
share in its first year of operations.
In the early 1980's the telecommunications industry was deregulated. In
essence the federal government forced the breakup of AT&T to promote
competition and a more competitive marketplace. Numerous companies like
MCI and Sprint reaped great benefits as they provided consumers with
lower rates. At one time both MCI and Sprint were trading under $5.00
per share. Today MCI is trading at $37 per share while Sprint is trading
at $56 per share. Both stocks have enjoyed gains in excess of 1000%.
The deregulation of the electric utility industry is expected to provide
similar potential. It is for this reason that we feel that Keystone
will be at the forefront of this deregulated industry. As stated
earlier, Keystone's business is very simple. Keystone Energy contacts a
commercial or residential consumer and offers them a 10% to 25% discount
on their current electric utility service. If the customer agrees and
wants the discount the customer is then switched over to Keystone
Energy. The customer still uses the exact same utility service that
they are currently using and the customer still pays the bill to the old
utility company. When the bills are received by the old utility
company, the electricity portion is credited to Keystone Energy and the
transaction is completed. There is no change in service or quality to
the user. The only change is in price. The consumer now pays 10% to
25% less for their electricity versus what they were paying last month.
This business is literally that simple.
The companies that have prepared for this incredible opportunity over
the last year should gain the largest market share and be the most
successful. Keystone Energy is one of those companies. For the past
three months Keystone Energy has been marketing their services to the
community with a limited staff. With that limited staff, Keystone has
already generated over $4.0 million in signed contracts on an annualized
basis. Currently Keystone has contracts with over 300 industrial
customers, 300 commercial customers and 3,000 residential customers.
Over the past five days Keystone has added additional sales personnel to
its staff. As of this writing, Keystone had over 25 representatives
offering their services. The individual sales force is expected to
expand to over 500 representatives during the next 60 days. Keystone
Energy has contracted with a telemarketing company that was ranked as
the fastest growing private company by Inc. Magazine in 1995. This
group is slated to begin marketing Keystone's services in the next two
weeks. This will allow Keystone Energy to remain a step ahead of their
competition.
Another strength in Keystone Energy can be found in its management
team. The president and CEO of the Company is Richard Saxby. Mr. Saxby
is the former president and CEO of Quantum Communications and Energy,
which organized more than $1.7 billion in utility bills following the
deregulation of the natural gas industry. Mr. Saxby has extensive
experience in utility auditing and marketing in the electricity, water,
gas and telephone industries. Mr. Saxby is joined by an esteemed and
highly experienced board of directors that includes Chairman of the
Board, Thomas Murray, who is also a director of Westfed Holdings, a $5.0
billion institution with 30 offices throughout California. In addition,
Mr. Murray is the son of the former
chairman of the Atomic Energy Commission and the grandson of the
co-founder of Con Edison. One other key director, Erich Augustin, is
senior vice president and CFO of Chase Manhattan Bank of Connecticut.
The Company feels that it can conservatively gain a 1% market share in
California. By the end of 1998, Keystone Energy anticipates having over
100,000 residential customers, 10,000 commercial customers and 10,000
industrial customers. Remember that with very limited marketing the
Company has already signed contracts with over 3,600 customers.
Keystone Energy is projecting that their first year revenue will exceed
$170.0 million with an anticipated profit of $12.2 million or $0.82 per
share. (This is based on the current share structure of 14.7 million
shares outstanding. Outside of financing activities, the current share
structure is not expected to change.) Second year revenues are projected
at $288.0 million with a net profit of $20.8 million or $1.41 per
share. Please note that Labor Ready (LBOR), the first company that the
Future Superstock selected for inclusion on our site, released their 9
month earnings results on Tuesday. For the past three quarters Labor
Ready earned $4.4 million or $0.36 per share. On Friday, October 24th,
Labor Ready closed at $34.625 per share, up $5.875 per share for the
week.
It is clear that Keystone Energy is positioned to take advantage of the
deregulated electric utility industry. The Company has put all the
pieces in place, which include sales and marketing, a solid management
team, solid support staff and the foresight to be in the right place at
the right time. As noted above, Keystone has already generated solid
revenue with a limited sales staff. We feel that Keystone Energy could
be a MCI or Sprint in the making. If any investor wants to take
advantage of this newly formed industry, we recommend that you take a
serious look at Keystone Energy. With a conservative earnings multiple,
if the Company is able to meet their sales and income projections, we
would expect to see the stock trading in the $15.00 to $20.00 range
within the next 3 to l2 months. Since the stock was listed on the NASDAQ
BB market the stock has traded as high as $5.50 and as low as $4.375. We
believe that Keystone Energy offers investors a phenomenal opportunity
as well as a chance to get involved with a stock from the ground floor.
We expect several news releases to be issued by the Company within the
next one to three weeks. On Friday, October 24th, Keystone Energy
(Ticker: KESE) closed at $4.97 per share with a bid of $4.875 and an
offer of $4.97 per share.
Keystone Energy Services, Inc. is traded on the NASDAQ BB under the
ticker symbol KESE. Keystone Energy last traded at $4.97 per share with
a bid of $4.875 and an offer of $4.97 per share.
****************************************************************************
For additional information about Keystone Energy Services or an investor
relations package you can call their investor relations department at
l-800-785-9345 and speak with Anita Carlisle. You can also contact the
Company directly at l-310-443-1500.
****************************************************************************
****************************************************************************
The Future Superstock is an independent publication committed to
providing timely and factual analysis of selected companies. Companies
are chosen on the basis of financial strength and potential in order to
provide the investor with significant upside potential while minimizing,
wherever possible, the downside risk. All statements and expressions
are the opinion of The Future Superstock and are not an offer or
solicitation to buy or sell any securities mentioned. All expressions
made by The Future Superstock are derived from materials supplied by the
Company as well as outside sources and interviews conducted by The
Future Superstock. While we believe all sources of information to be
factual and reliable, we in no way represent or guarantee the accuracy
thereof, nor the statements made herein. The Editor, members of the
Editor's family and/or entities with which they are affiliated may own
stock of or have other financial dealings with the companies reviewed in
this publication. The Future Superstock and/or its affiliates act as
consultants to the companies, and do receive compensation for
promotional or public relations services to such companies in stock or
cash. The Future Superstock was compensated thirty five thousand shares
for its public relations services and for the dissemination of this
report. The editor or the editor's affiliates and/or families may own a
substantial position in the company mentioned above. All claims should
be verified by the reader. Investing in securities is speculative and
carries a high degree of risk. This document may be quoted, in context,
provided that proper credit is given, including the publication Internet
address of the publisher.
**************************************************************************** |
