AUTM float < 200,000. Here's a writeup from The Microcap Review:
Company Profile - July 2000
Auteo Media, Inc (OTC-BB: AUTM, $4 - $4 1/4)
It is very difficult and time-consuming to sift through the thousands of microcap stocks on the OTC bulletin board to try to find the very small percentage that actually have a chance to make it big. Let’s face it, a vast majority (90+%) never make it. They are undercapitalized, mismanaged, overwhelmed by competition, and have non-executable business plans. However, the very few that do make, make it very big. That’s why we play the game, to watch our pennies turn in to dollars. Lots of dollars.
We look for stocks that:
(1) have a unique, credible, simple and executable business plan,
(2) are currently or very near-term prepared to bring their product or service to the market,
(3) sound balance sheet with low/no long-term debt,
(4) have secured financing or are in the process of securing financing to fund business plan,
(5) are relatively unknown to the street,
(6) have reasonable amount of shares outstanding and fairly low float,
(7) have solid management that communicates well with investors and has a stated desire and plan to move to a larger market listing, and
(8) has a very good chance (in our minds) to achieve a larger market listing within one year
We have been very fortunate with many of the stocks that we have profiled. MDIH was profiled under a buck, jumped to $12, and has just recently landed on Nasdaq Smallcap (now trading as LTRY). HQNT has applied for Amex listing and is currently waiting for approval. ETCH is well on its way (don’t let the current stock price fool you, the 1st qtr numbers should give us a good indication on how close they are). We even had tremendous runs on stocks that didn’t (and probably won’t) make it to a larger market listing any time soon (we weren’t always so discriminating), including EISQ which went from under a buck to $6, EBLD from $2.50 to $8.03, and even PESO and JBRD more than doubled for us (which shows that money can still be made if the timing is right, but you can’t be shy about taking profits when they’re on the table).
We think we have found an extremely exciting and timely opportunity that meets all of our criteria:
Auteo Media, Inc. (OTC-BB: AUTM, $4 - $4 ¼ as of 7/26/00).
About Auteo Media, Inc.:
Auteo Media, Inc. is a leading provider of online data and media solutions to buyers and sellers of autos and auto accessories. Auteo Media operates Autoloco.com and Bidthatcar.com, providing one-stop convenience for consumers and dealers to locate and buy new and used vehicles and is developing Partcart.com, a OEM auto parts warehouse, Pocketauto.com and Palmauto.com, which will provide auto dealers the ability to conduct online transactions at any time and anywhere, and Contactauto.com, a proprietary contact management system to help auto dealers maximize e-commerce customer interactions. Auteo Media works with more than 6,000 auto dealerships, auto parts suppliers, and other commerce partners and is becoming one of the leading technology companies serving the automotive industry.
How it meets our criteria:
(1) It must have a unique, credible, simple and executable business plan
This is one of the company’s strengths. Their business plan is really so simple, it’s one of those "why didn’t I think of that" plans. It’s really four business plans in one, all interrelated. Their first and oldest brand is "Dealer Specialties", which provides window labels and internet exposure services for new car dealers in the Northwest and California. This division has been in operation for about three years and has experienced rapid growth. The company employees ten account specialists who visit over 140 new car dealerships weekly and obtain digital pictures and printed window stickers of new/used vehicles, which is then updated to multiple Internet partners such as Lycos, Yahoo, AOL, Autobytel.com, Microsoft’s CarPoint, AutoVantage, and others. In June, 2000, Auteo was retained by Toyota to provide photographic and data gathering services for Buyatoyota.com, Toyota’s new e-marketing initiative. This is a service that the dealer cannot cost-effectively perform. Auteo collects $10-$12 per vehicle at the time the data is collected. The business has grown 60% annually since 1997 (primarily in the Northwest/Washington state market), where they already have achieved a 75% market share of new car dealers. In just 3 months, they have captured 5% of the San Francisco market. Monthly revenues are currently running at over $70,000 monthly, with pre-tax profits over 35%. This growth will continue with immediate plans to expand its coverage in Northern California and an initial penetration into the Oregon market. This has been the cash cow for the company and will remain a nice growth vehicle for them, but as exciting a growth opportunity it seems, it is not the company’s primary growth vehicle for the future.
The second portion of their business plan is the proprietary automotive locating, bidding and buying portals, autoloco.com (http://www.autoloco.com ) and bidthatcar.com (http://www.bidthatcar.com ). Originally, vehicle data collected from their Dealer Specialties unit fed into these sites, making them primarily a Washington state automotive portal. However, in May, 2000 the company acquired a national database of over 300,000 vehicles from over 6,000 dealerships across the United States. Auteo Media is now expanding autoloco.com from a regional marketing presence with 11,000 vehicles in one state to a national presence with over 300,000 vehicles from over 6,000 national dealers. Autoloco.com will become a top automotive portal offering customers one of the largest new and used car selections, informative automotive content, pricing, insurance, financing, credit reports and more. Autoloco.com will be one of the few sites that will allow car shoppers across the country the ability to view a picture of the car, the window sticker, and also importantly, warranty information. Autoloco.com will also provide services to its dealerships such as wholesale trades, inventory reports, internet results and e-mail services. Auteo plans on adapting its popular bidthatcar.com to the same national database. The company intends to derive revenues from a monthly dealer subscription of $14.95 to $24.95, which is significantly less than the $1,000+ monthly charge from other major internet players such as Autobytel, Autoweb, and CarPoint. Since the Company already has secured the database for the 6,000 dealers, they feel they will be able to quickly sign on these dealers to the service, especially considering their subscription rate is only about 2% of the major internet players. Outside of a sales force to market the products to dealers, the profit margins here are very high.
The third portion of their business plan, and the most exciting as a future growth vehicle, is the rollout of the first ever wireless service to that enables dealers/salespersons to locate and get quotes on new and used cars, immediately follow up on e-mail sales leads funneled from automotive sites, and respond back to customers with price, availability, options, and appointment times within minutes using net-enabled cellular phones and wireless handheld devices (such as a Palm Pilot). The company formally introduced this to the market on July 25, 2000, and to compliment their service and marketing efforts they just recently announced that they have signed an agreement with AT&T Wireless Services, Inc., an operator of one of the world's largest digital wireless networks for voice and data communications, to become a Data Solutions Provider. Under terms of the agreement, Auteo Media will join AT&T Wireless' Data Solutions Program, and will provide subscribers to its PocketAuto.com and ContactAuto.com network with AT&T Wireless' PocketNet® Internet access and cellular phones.
Through Contactauto.com and PocketAuto.com, the company believes it has a strong lead time and technology advantage over potential competitors. Revenue will be generated from an initial monthly revenue of $100 and an additional $19.95 per user fee. For an average dealership with nine salespersons, that would total $279.55 per month. With a potential market of over 20,000 car dealerships and 180,000 potential clients, this represents an extremely healthy recurring revenue stream for the Company.
To give you a real-life example of how beneficial this is, two weeks ago I had to buy a new car (emphasis on "had", the car doctor was ready to give the last rites to my old car, which served me well). I did the internet thing, using Autobytel and CarPoint to quickly to research new car information and finally used Autobytel to get price quotes. The request for quote was sent out to three different dealerships in my area. All the quotes were comparable (about $1,000 over invoice), but the first to respond ended up getting the business (none were same-day responses, by the way, and one was over two days). That alone was worth to the winning dealer about four times the total monthly fee a dealer would pay for this service.
The ContactAuto service will also allow dealers to evaluate the performance of their salespersons by allowing them to track lead and contact followups. Again, Auteo Media is the first to the market with this service, and they are already generating significant interest among dealers. We expect to see the first contracts signed very shortly and expect them to continue rapidly as word of mouth spreads. Like AutoLoco.com and Bidthatcar.com, the profit margins here are very high, the potential audience is large, and the same sales force that markets Autoloco.com and Bidthatcar.com will also be able to market PocketAuto and ContactAuto. Perhaps even more exciting is that the framework for PocketAuto and ContactAuto lends itself to nearly any business which involves a sales team, such as real estate. We see this as a natural progression for the company once the services are established in the automotive industry.
Finally, the fourth piece of the business plan is PartCart.com (http://www.partcart.com ), an on-line automotive accessory e-commerce site. The automotive aftermarket part market is valued at over $100 billion dollars. Partcart.com will provide most of the top aftermarket accessories that are in demand (but not time sensitive repair parts like a new alternator). Auteo Media has a distribution relationship with one of the largest automotive accessory wholesalers in the country with an estimated 500,000 accessories available. PartCart acts as the front-end point of sale model, which will transmit the customer order to the supplier which will then ship the merchandise to the customer. Since PartCart never has to take possession of the merchandise or carry the inventory, expenses will be minimal. PartCart will be linked to Auteo’s other internet services, and dealers subscribing to their services will receive part discounts on PartCart.
Now for the rest of our critieria:
(2) Currently or very near-term prepared to bring their product or service to the market
Autoloco.com and Bidthatcar.com already exist, but are expected to expand with a much larger database of vehicles and dealers. Dealer Specialties has been in existence for nearly three years, and is expanding rapidly into new markets. The wireless internet and CRM services (PocketAuto.com, PalmAuto.com, and ContactAuto.com) are due for full roll out very soon (web sites are already up at pocketauto.com and contactauto.com ). Partcart.com is up and running, but hasn’t really been marketed yet.
(3) sound balance sheet with low/no long-term debt
As of the last 10Q, the company has no long-term debt. Current ratio is about 2:1. The company recently announced record 1st quarter revenues (ending March 31), which grew 61% to $211,860, with gross profits up 64% to $195,566. Current assets grew 61% and long and short-term liabilities declined 46%. Even including acquisition costs, a new corporate office, the addition of routes and labor costs associated with expansion of Dealer Services into California, and development costs associated with their wired and wireless internet/e-commerce initiatives, the company just narrowly missed profitability, with a loss of only $26,806. As sales increase enough to leverage general and administrative expenses, the company should quickly achieve profitability.
(4) have secured financing or are in the process of securing financing to fund business plan
The company has already initiated financing activities to use primarily to hire staff necessary to effectively develop and market their products and services and to increase market exposure to increase penetration and profitability. Financing will also be used to form marketing and development alliances and for strategic acquisitions.
(5) relatively unknown to the street.
That’s pretty much a given. To give you an idea on investor awareness at this point, there is no board on Silicon Investor, and the one on Raging Bull has only 17 messages.
(6) reasonable amount of shares outstanding and fairly low float
The last reported share count was 8,550,000 outstanding. Of that, about 5 million is restricted. Factoring in stock that is tightly held by insiders, it is believed that the effective trading float is less than 200,000 shares. In fact, in order to gauge how much we’re taking out of the float and to combat potential short positions caused from buying volume exceeding the float, if you do purchase shares of AUTM, please e-mail us back with a share count so that we can keep the company (and you) informed on how much we have taken out of the float (this will be kept strictly anonymous, only totals will be reported).
(7) solid management that communicates well with investors and has a stated desire and plan to move to a larger market listing.
CEO and President Steve Van Leeuwen brings over 15 years of sales, development, profit center, national and international marketing experience to Auteo Media. The company recently hired a seasoned wireless industry veteran (Mark Silverman) to lead its wireless data and contact management business unit. They have a stated mid-term objective to move from the OTC to Nasdaq Smallcap.
(8) has a very good chance (in our minds) to achieve a larger market listing within one year
This appears to be very attainable if the company achieves the revenue and profitability projections that they and we are anticipating.
We’ve always said that if a microcap company wants to trade like a big company, it needs to act like one. In anticipation of significant and rapid growth, has recently retained a major auditor, Grant Thornton, to conduct their financial audits. Additionally, the company is current on their financial reporting, and conducts annual meetings (a proxy just recently went out for an annual meeting in August).
Again, if you do end up picking up some AUTM, please leave us an e-mail back with a share count. We’ll keep track of the total share count and report back to you and to the company of what we as a group are holding to help determine what has been taken out of the float and to help determine if a short position exists.
For more information visit auteo.com .
The Microcap Review
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Please refer to web site for full disclaimer. Note that we fully disclose specific compensation when we do receive compensation from companies that we profile. At this point, we are anticipating compensation from Auteo Media, but the details have not been finalized at this time. When that occurs, we will disclose it accordingly. We may also purchase and sell shares on the open market. This is not a recommendation to buy or sell these securities. The Microcap Review is not a securities broker-dealer, investment advisor or a securities exchange and is not registered as such with the Securities and Exchange commission nor any state securities regulation authority. Readers of this e-mail newsletter should recognize that the Microcap Review is only providing a medium to discuss news, rumors, and perceived potential regarding companies we are following, and although we attempt to confirm all information presented, some of the information presented may be forward-looking and speculative in nature and may not occur. Accordingly, investors should be aware that the Microcap Review has not evaluated nor investigated any of the companies listed in this e-mail to determine their merit or the risk of investment in any such company. The Microcap Review does not endorse any company listed herein and does not represent that the information contained in any offering documents states all material facts or does not omit a material fact necessary to make the statements therein not misleading. In no event shall The Microcap Review be liable for direct, indirect, incidental or consequential damages resulting from the use of this information. The Microcap Review shall be indemnified and held harmless from any actions, claims, proceedings or liabilities with respect to the information herein. The Microcap Review is not liable for any investment decisions by its readers. This does not represent a solicitation to buy or sell the securities discussed within the report. It is strongly recommended that any purchase or sale decisions be discussed with a financial adviser or broker prior to completing any such purchase or sale decision. |
