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Harris L. Berenholz, CFA
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I like analyzing stocks, especially small caps and micro caps. My firm, Carpe Diem Advisors, LLC provides investment ideas, research and analytical services. Before establishing my firm I was (for 18 years) a Managing Director of Invemed Associates LLC, a New York Stock Exchange member firm,... More
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  • A Nobel laureate heads research at International Fuel ($IFUE)

    In a recent Forbes magazine article entitled "Danger: America Is Losing Its Edge in Innovation", the author noted that:

    “…scientists and engineers are celebrities in most countries. They’re not seen as geeks or misfits, as they too often are in the U.S., but rather as society’s leaders and innovators. In China, eight of the top nine political posts are held by engineers.”

    International Fuel ($IFUE-$0.14)  is a growing technology company that has developed proprietary liquid fuel additives that enhance the performance of liquid hydrocarbon fuels and, at the same time, help preserve the environment. Its hands-on Director of Science & Technology Dr. Sergio Trindade is a globally recognized consultant and expert in sustainable development and energy, with especial reference to biofuels.

    He served five years as the Assistant Secretary General of the United Nations for Science and Technology and continues to provide consulting for the UN system, including the World Bank, and many private organizations worldwide, regarding energy, technology and the environment. 

    Dr. Trindade is a co-laureate of the 2007 Nobel Peace Prize as a member of the International Panel on Climate Change - IPCC. He provides expert technical consulting for IFT and its commercial clients and plays an integral part in the research, development and demonstration of IFT products, as well as the protection of IFT’s intellectual property rights.

    Dr. Trindade’s role continues to be crucial to the success of International Fuel in commercializing its proprietary, breakthrough technology.

    Disclosure: I and my family own IFUE shares.

    Jun 07 5:00 PM | Link | Comment!
  • Business at International Fuel Technology($IFUE) is picking up steam
    Our past observationsThe value proposition:

    International Fuel's additives save money while helping the environment in that they…

    • Increase overall gas mileage
    • Improve the quality and length of their engine's life
    • Reduce exhaust emissions such as carbon monoxide and other gases 
    • Improve lubricity of the fuel, which
    • Reduce  wear and tear in the engine and other components
    The  British Experience:

    Between 2006 and 2010, the Association of The Train Operating Companies of the U.K. (OTCPK:ATOC) retained the respected railway consultant Interfleet Technology Ltd to manage a series of trials to test the effect of using International Fuel Technology’s proprietary fuel additive in rail engines. The first four laboratory tests demonstrated compelling positive effects. In two of the trials, reductions in fuel consumption of 6.9% and 5.9% were realized. In addition, particulate matter emissions were significantly reduced in each of the four test-bed trials.

    Product distribution is the key at International Fuel.

    A deal with a major distributor in the U.K. would be a boon to International Fuel’s business.

    Today’s Important Developments
    • Unipart Rail (part of The Unipart Group of Companies), the U.K.’s leading distributor to the rail industry, signed a marketing and distribution agreement providing Unipart Rail the rights to sell International Fuel’s unique fuel additive formulations for fuel economy to the U.K. rail market.
    • This relationship is a major step forward for International Fuel by providing a powerful platform to expedite the commercialization of DiesoLiFTTM 10 in the U.K rail market.
    The Future

    Unipart Rail is developing both marketing strategy and materials and will begin actively promoting use of IFT products to its customer base, which includes most train operator in the U.K. 

    Success in the U.K. will enhance the company’s credibility and help corporate efforts with the numerous European rail operators with whom the company is in active commercial discussions.


    Harris L. Berenholz, CFA

    I and my family own these shares.

    Jun 06 12:41 PM | Link | Comment!
  • Why I like and own Fortress International (FIGI-1.50) shares

    The company

    Fortress International Group, Inc. consults, plans, designs, builds and maintains mission critical facilities, such as data centers, call centers, network operation centers, communication facilities, where security is critical and where redundant electrical, telecommunication and mechanical systems are necessary to ensure 24X7 on line availability. It offers knowledge for electrical, mechanical, telecommunications, security, fire protection and building automation systems. The services offered by the Company include technology consulting, design and engineering/planning and programming, construction management, and facilities management.

     

    Investment thesis:

    The company has…

     Good prospects

    1.    Rapid growth in cloud computing creates…

    2.    Increasing capital investments in data centers because…

    3.    Aging legacy centers cannot accommodate new technology

    4.    Pipeline and backlog activity rising

     Improved business model

    •       Growing importance of recurring business 
    •       Closed 2010 with 37 service agreements providing annual recurring revenues of  $6 million 
    •       Shifting revenue mix from lower margin construction management to… 
    •       Higher business  margin  facility management and consulting/engineering   
    •       Broad, diversified, blue chip customer base in both public and private sectors
    •       Reduced SG&A
    •       Better expense management
    •       Turned profitable in 2010 after many years of losses

    Solid finances

    •      No bank debt
    •      $11.2 million in cash...and building

    Potential for positive surprises from…

    •        Conversion of smaller scale projects into larger full-scale projects
    •        Translation of solid customer interest into contract wins

     

    Takeover appeal

    International energy management giant Schneider Electric ($15 billion in revenues), is on an acquisition binge. On April 5th, its latest acquisition was of Lee Technologies, a company comparable to FIGI. This acquisition confirms the growing interest, and the desirability of participation, in this space. Although no financial details of the transaction were released, based on my conversations with industry contacts and applying an estimated comparable valuation, my "guesstimate” is that FIGI could be worth over $3 a share in a buyout scenario.

        

    Harris L. Berenholz, CFA

     

    Jun 06 12:17 AM | Link | Comment!
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