₪ David Pescod's Late Edition December 6, 2007
BENNETT ENVIRONMENTAL (T-BEV) $0.16 -0.02
TS03 INC. (T-TOS) $2.56 +0.01
ARISE TECHNOLOGIES (V-APV) $2.04 -0.16
GENESIS WORLDWIDE (T-GWI) $1.50 n/c
We first started following Sara Elford’s work several years ago when all the analysts and newspapers were gushing over a company called Bennett Environmental. The analysts were in love with it and had huge expectations. And then of course there was Sara, who was saying….Sell!
She was saying sell so vigorously that we ended up actually shorting some of it and eventually (as the chart shows you) she was proven more than right. A previous $20 stock is yours today for $0.20.
She does specialize in what they call “special situations” and over the last while, we interviewed her on a couple of her favorite stories, one of which is TSO3 Inc, which she has high hopes for and a $5.50 target. The Quebec-based company is involved with production of an ozone sterilizer and yesterday, the company announced the sale to a US hospital representing its 23rd firm sale to date. The announcement says, “This hospital is the flagship hospital of an Integrated Delivery Network in a major US city in the Mountain Time Zone.”
Why so secretive, we don’t know, but Elford is a big believer that the companies involved with the sales cycle is probably about 18 months long and therefore has huge expectations for year-end (in other words, this is a very important quarter for the company) if her guess is right. She has expectations of 15 to 25 sales of whatever this ozone sterilizer is in this quarter and this is only the third purchase in the fourth quarter. On the other hand, if you look at her research, her expectations for sales of this product over the next while are pretty lofty and hence her $5.50 target.
One should be aware of investment risks in this story (we are quite long the TSO3 story because we’ve learned to actually follow Sara) and she writes on the investment risks, “Key risks include, but are not limited to: slower-thanexpected adoption of the 125L, dependence on a single product in a single market, competition from incumbent technologies/players, the emergence of a new technology to compete with ozone, risk of patent infringement and/or product liability issues, exchange rate risk, and the always challenging transition from product development to commercialization.” You got that? Obviously, there are things that can go wrong.
Meanwhile, two of her other favorite stories in her top three remain, Arise Technologies, currently building a plant in Germany that could have huge sales later this year on energy-alternative products and has assembled a rather significant team to run those assets.
Genesis Worldwide is involved in construction and particularly the light-steel structural frames for buildings seven stories and smaller. So far this story looks like it’s been totally ignored by the market ... but then Sara always seems to be following stories no one else is or else going against the popular view.
TIREX RESOURCES (V-TXX) $2.95 -0.27
These days in the game of mineral exploration, you definitely travel far and wide for your opportunities as who knows where the next potential big mine is discovered. And these days, particularly with the Canadian Loonie so high, labor so expensive and hard to find, you have more reasons than ever to journey far and wide. But who would have thought Albania? But now we find ourselves looking at Albania because of the recent addition of Abby Badwi to the team of Bankers Petroleum (BNK) and their huge project in Albania and now Tirex Resources is creating some big interest in the mining exploration game.
Today Tirex announces a private placement financing of $5,500,000 and the company led by former Canaccord broker Bryan Slusarchuk is investigating up to 17 small former producing mines in Albania with emphasis on small. Whether they are going to be able to put together something big is the question, but obviously they now have the money and expertise and will be starting some pretty aggressive exploration over the next while.
Ironically, some of these smaller mines back in the days of communist rule were operated in a very top-down manner and some of these operations never did go into production because in amongst the copper was zinc levels so high they didn’t know how to handle it...and never were mined.
It will be interesting to see what this exploration program discovers and I’m sure modern technology will easily handle this problem/opportunity.
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