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A Hidden Treasure- Premier Alliance, Why Wall Street's Most Successful Investors Investing In This Company?

Jul. 17, 2013 4:41 AM ETRTNB
Weixing28 profile picture
Weixing28's Blog
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Most investors do not have the time to do research on thousands of companies to find undervalued and undiscovered gems. I understand that it can be lengthy and frustrating. If you find yourself in that situation, perhaps this article will provide you with an actionable investment idea. The idea did not come from me. It came from Wall Street's most successful investors.

The company name is Premier Alliance Group (PIMO.OB), who provides business and technology consulting services to businesses in the United States. The company is currently transitioning away from being primarily a financial consulting company (stagnant growth) into an energy solutions company (via the two acquisitions of GHH and Ecological). The Company, effective with its acquisition of GHH on March 5, 2012 and began operating in two business segments: the Risk/Compliance segment and the Energy and Sustainability Solutions segment.

Strong Management Team

This is unreal quality of management and board for such a small company. Please clink for management and other board of directors.

Joseph Grano is now the Chairman of the Board of PIMO (owns 4.48 million shares). He was previously the Chairman and CEO of UBS Financial Services (formerly Paine Webber) - NYSE: UBS.

Board members include Isaac Blech (Founder of Celgene- NASDAQ: CELG), who is among Wall Street's most successful biotech investor, along with his families and trust, own about 10 million shares based on recent filing Page 52.

Other member includes Harvey Pitt (Former SEC Chairman), John Catsimatidis (CEO of largest grocery chain in NYC and Forbes Billionaire who's is running for mayor on New York City currently).

Strong Client Base

Premier's typical customers have historically been Fortune companies; a sampling includes:

Ally Financial Inc.

Honeywell, Inc.

Anheuser Busch Companies


Bank of America Corporation


California Steel Industries, Inc.

Schneider Electric

Duke Power Co.

Southern California Edison


Wells Fargo & Company

Gulfstream Technologies, Inc.


Strong Balance Sheet ($9.2 million in cash and $23 million in stockholder's equity)

There are 23 million common shares outstanding currently and approximately 42 million common shares upon full conversion of preferred shares. There are warrants ranging from $0.78 to $14.65 in price) which will add even more cash as the stock appreciates to use of additional acquisitions next year, etc.

The company has been in discussions for a big new credit line which will definitely fuel faster growth and increase margins while avoiding dilutions for existing shareholders.

The company attracted the attention of a tier one Brokerage firm (Maxim Securities) and Institutions (Wells Fargo).

Maxim recently completed a preferred financing (converts to common at $0.75) for approximately $12 million dollars with accredited investors (individuals and institutions). A road show is likely to occur late in Q3 in conjunction with the company ramping revenues and becoming profitable (company expected to be slightly cash flow positive last quarter).

A recent FORM SC 13G filed on 06/11/13 showed that WELLS FARGO owned 11.62% of the company.

Insiders NOW buying stock aggressively (several directors have purchased shares in open market reported June 26-July 9th).

So far they have purchased around 100,000 shares in the open market

Fast Growing Energy and Sustainability Solutions Segment

This segment is now comprised of GHH and Ecological, with GHH beginning the segment effective upon its acquisition March 5, 2012 and Ecological added upon its acquisition December 31, 2012.

GHH, a wholly owned subsidiary has two "vertical operations" consisting of Energy Efficiency and Sustainable Infrastructure. GHH's primary focus is on energy related projects. GHH's recognized revenue for the three months ended March 31, 2013 was $1,780,000 or 60% of last year's annual total. In addition, GHH's business plan refinement is taking root and believes its business model is now aligned for optimal growth, as evidenced by the recent execution of over $10,000,000 in firm contracts (already more than three times their entire revenue for 2012).

For Ecological, LLC, On December 9, 2009, New York's City Council passed legislation known as

the Greener, Greater Buildings Plan (GGBP). This legislation requires all buildings in New York City that are 50,000 square feet or larger to benchmark energy and water consumption, perform an audit and retro-commissioning of base building systems, perform a lighting upgrade, and install sub-meters. Under the GGBP, NYC Local Law 87 requiring Energy Audits & Retro-commissioning processes went into effect. The Audit and Retro-Commissioning requirements will be due in groups of buildings beginning in 2013. This should lead to a HUGE amount of business for Ecological in the coming years with hundreds of buildings required to participate. Ecological develops and implements energy sustainability action plans for real estate portfolios, buildings, and tenants in order to reduce costs, improve efficiency, achieve regulatory compliance, and increase value. Ecological's services range from metering and monitoring, to in-depth energy audits and analysis, to executing retrofit projects. By improving the efficiency of environmental systems, such as energy, water, and carbon, landlords can reduce costs, reposition client buildings as "green" and create higher value and yield for their real estate assets and portfolios.

Today company just issued a press release that its Energy and Sustainability Division has been selected to present at the 2013 World Energy Engineering Congress (WEEC) in Washington, D.C. in September. It also shed the light that the Demand Response services will be another area to add fuel for the growth.

Based on the PR, "market was estimated to be in excess of $1.3 billion in 2011, and is expected to grow rapidly according to a leading research firm. Demand Response refers to a rapidly evolving utility application, otherwise referred to as the "smart grid". It encompasses hardware, software and services, and is catalyzing Premier Alliance's Energy Services division and should continue to generate strong growth going forward."

In addition, the company seems to be the process of targeting additional accretive acquisitions. This industry is highly fragmented and there are many companies that could benefit from this management team and funding abilities. There could be great synergy to look forward over time.


In summary, how often do you see a small company with this type of management team and growth prospects (well financed by a major brokerage house) performing work for fortune 500 companies that is currently trading below $1 with 30million market capitalization?

These Wall Street's most successful investors (insiders) surely are not buying for a trade. It has been trading very quiet for the past three years. However, this company will not stay under the radar in the coming months.

With the growing traction of its Energy and Sustainability Solutions Segment, the share price should be valued at between $1 and $3.

Interested investors should perform additional research before opening a position in the company's common shares. The company is still in the transformation and hasn't generated positive net income yet. However, it's the author's belief that Premier Alliance will be a good mid to long-term investments over the next 12 months with conservative targets 2 to 4 dollars.

Disclosure: I am long PIMO.OB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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