Seeking Alpha

JoeNatural's  Instablog

Send Message
I use my strength of basic common sense and DD skills to lead me down the path to profits. 2013 return of 108%, yet I will always remain humble.
View JoeNatural's Instablogs on:
  • ITKG: Poised For A Pop - The News And The Chart Say Buy

    With all the major indices down year to date, commodity prices sinking, unsettling news coming from China, Caterpillar layoffs and a confusing message from the Fed, it is becoming increasingly difficult to find a good home for your money.

    One stock that has gone against the downward trend is ITKG. It is up 10% YTD and appears to be poised for higher levels soon. The company just completed its quarterly conference call and if history is any indicator, this stock should start to move.

    Back in February, the CEO stated that the company was 3-6 weeks away from an agreement that would ensure them global commercialization. The stock did not immediately react to this proclamation, but within a couple of days after the call, the stock began to steadily move up. The day of the conference call the stock closed at .44 cents and one week later it closed at .60 cents. Roughly six weeks after the call the stock topped out at .85 cents.

    The CEO did come out and say that the company would not meet the 3-6 week timeline for the agreement as originally thought, but that things were still very much on track and that it was going to take a little longer.

    Since that time, the company had several other positive things announced and the stock has been bouncing around a bit on an intraday basis, touching the low .80's on more than one occasion.

    This evening, the company did report reduced debt and increased revenue, but the real message was that they are closing in on the global commercialization agreement spoken about in February. It will happen this time and I think very soon. I'm guessing in the next 3-4 weeks.

    If history is any indicator, the stock will start to trade up almost immediately and likely trade up to the low .80's, only this time, I think the news will take it over .85, and when this happens, the stock should break out to nearly $1.50. Just how high it goes depends on how good the news is, but there's no doubt the positive newsflow will pick up going forward.

    Sep 28 7:33 PM | Link | 4 Comments
  • Integral Technologies - CEO Report Card

    The date is approaching whereby Doug Bathauer will have reigned as ITKG's CEO for three years. Since his initial hiring, I've written several articles here, here, here and here about Integral Technologies, so I thought it was now appropriate to put the spotlight on the CEO himself, grading his performance in the areas that matter most to shareholders.

    For starters, I don't think there's anyone who would deny that Doug Bathauer inherited a company that was nothing short of a multi-year utter failure and complete disaster, attempting to fix a company that was as broken as broken gets. Why Bathauer would have even entertained the idea of a turnaround for a company that was virtually bankrupt on paper, was beyond me and a real head-scratcher. Obviously, he was confident that he could make the necessary structural changes and deals required to monetize ElectriPlast and kickstart the company. Saying the challenges in front of him were significant would be a massive understatement. Prior management had no game-plan whatsoever and most likely viewed the publicly traded shell as nothing more than a vehicle from which to draw their salaries at the expense of shareholders.

    So Let's See What Doug Bathauer Has Accomplished

    Upon his arrival, Bathauer immediately set out to eliminate the waste and pork of the past and thus made several key changes. He shut down the Philadelphia sales office, saving the company $50K a month while establishing the Detroit Tech Center, a strategic location where customers can interact with ITKG's engineers and view ElectriPlast demonstrations. The timely hiring of a superstar engineer from Lear Corp. in Slobodan Pavlovic was key to the new tech center, as Pavlovic is widely known as an innovator in the electric vehicle industry with many patents under his belt.

    Critical for stock price appreciation, Bathauer eliminated the toxic, convertible debt that placed a lid on the stock and he cleaned up the balance sheet by reducing liabilities from $2.7 million to under $700K while also getting the company current with vendors. He eliminated prior management's preferred shares that would have eventually created a massive roadblock to stock price appreciation on down the road. On average, the stock traded only $7K a day in the .25 range when Bathauer arrived and now over .50, the stock is averaging more than $75K daily. Liquidity has increased greatly and investors have become much more comfortable owning the stock. Insiders participated heavily in private placements, sending a strong signal to shareholders that the company could indeed monetize ElectriPlast and eventually become the company it was touted to be. More importantly, shares of the stock were moving into the hands of those behind the technology and out of the hands of loan sharks. None of this could have happened without participants firmly believing in the new CEO's business plan moving forward.

    It didn't take long for the new CEO to ink deals with Hanwha, Delphi and BASF, quickly reassuring shareholders that Integral Technologies did indeed have the goods in ElectriPlast. For the first time in this company's two decade history, revenues were being generated. This brought me back to a phone conversation I had with the CEO of Jasper Rubber in which he told me, "Getting ElectriPlast to market has taken years, but once you're in, you're in." This tells me that the adoption of ElectriPlast will accelerate going forward.

    As if the above isn't exciting enough for shareholders going forward, Doug Bathauer recently announced a surprise breakthrough in lead-acid battery technology, a gigantic industry, inventing a corrosion resistant, leakage free, highly conductive plastic bipolar plate that's environmentally friendly. He stated that Integral is already in the process of developing partnerships and thus, shareholders can anticipate increasing newsflow going forward concerning new battery partners.

    Speaking of newsflow, Integral's CEO came aboard with the attitude of acting as a company that trades on a senior exchange, instituting not only a monthly shareholder letter, but quarterly conference calls as well. To date, Bathauer has done absolutely every thing he said he would and I suspect there's only a handful of CEO's out of several thousand on the OTC that fit that mold.

    It's obvious with Integral's 10X capacity expansion and new facility (5 acres set aside for even more) that Bathauer will have plenty to discuss with shareholders going forward.


    Shareholder Communication A+

    Execution of the Business Plan A-

    Leadership Abilities A+

    Company Finances A+

    Sep 27 11:06 PM | Link | 2 Comments
  • Kombucha Company Says Revenues Quadrupled And Could Quadruple Again

    American Brewing (OTCPK:ABRW), a rather new and thinly followed company that's trading on the OTC via an IPO last year, choosing not to come public on the OTC through the traditional reverse merger route, just told their shareholders that the reason there hasn't been any news for the last several months was due to a self-imposed quiet period. This lengthy time of silence just ended upon completion of the audit surrounding the acquisition of B&R Liquid Adventure's kombucha assets, and shareholders now have a better look into the acquiree's kombucha beverage business.

    It was learned that the B&R acquisition resulted in an immediate quadrupling of annual revenues, from slightly over $1 million to $4.2 million, and lifted American Brewing into a cash-flow positive position. The company stated in an 8-K that the acquisition consisted of $260K cash, a $140K note and equity, with the 1.48 million share equity portion issued at .34 being subject to a shareholder friendly, 18-month leak out, whereby no stock can be sold for 6 months and only 15% of the shares can be sold each quarter thereafter for one year. In agreeing to these terms, the previous owners of B&R obviously displayed confidence in the outlook for American Brewing. I suspect their confidence was also bolstered when both the CEO & V.P. of ABRW recently decided to forgive $500K of the $600K in accrued compensation.

    The most impressive and compelling statistic surrounding American Brewing's first accretive beverage transaction is the fact that the Kombucha brand acquisition was 26% dilutive, but in return, the company gained an immediate 300% jump in revenues while only paying .25 X sales due to a production-related lawsuit B&R was involved in, now no longer an issue. The company stated that there are other exciting "acquisitive" and "white label" deals in their pipeline that could have a similar impact on American Brewing as the first accretive acquisition, meaning yet another possible quadrupling of current revenues as I verified with the company shortly after their Sept. 8th press release.

    This "deals in the pipeline" disclosure makes it obvious as to why the company simultaneously announced the Kombucha brand acquisition along with the hiring of Chuck Santry, American Brewing's new Chief Operating Officer that previously took a small food company with $800K in revenues, built it up and watched it eventually sell for $44 million to a Pepsico joint venture. Santry apparently has the same plans for American Brewing, as he focuses the direction of the company towards the fastest growing category in the beverage sector, Kombucha. With Kombucha sales expected to rise from $600 million this year to a whopping $1.8 billion by 2020 per Kombucha Brewers International, Santry is wasting no time in capturing market share.

    American Brewing also provided guidance that is separate from any of the deals in the pipeline, stating revenue would grow 63% in the coming year, attributed to organic growth, addition of new store locations to existing accounts, accompanied by new accounts.

    Lastly, the stock currently trades at a price/sales ratio of 1.3, significantly under that of most mature beverage companies, whose growth rate is far less than that of American Brewing. The young company appears to be very disciplined with its finances, as evidenced by its cash-flow positive position. It does trade on the OTC, but I'm a fan of them choosing to go public via the IPO route versus the traditional reverse merger route that usually comes attached with a lot of previous entity baggage. The company has not participated in any stock promotions and thus remains very much under the radar. If execution continues to follow in the footsteps of the company's first accretive acquisition, I expect the stock to garner a lot more attention.

    Tags: ABRW, long-ideas
    Sep 15 6:50 AM | Link | 2 Comments
Full index of posts »
Latest Followers


  • Tel-Instrument: Guidance Calls For Revenues To Quickly Double Accompanied By Strong Earnings $TIK
    Dec 4, 2014
  • Integral Technologies: Game Plan Intact After First-Ever Recorded Revenue In Q1 $DLPH, $BASFY, $ITKG
    Nov 24, 2014
  • GeoInvesting (over 25K followers) just put out a note this morning that $ALJJ is worth at least 130% more than the current $3.45
    Nov 11, 2014
More »

Latest Comments

Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.