Being the economics geek that I am, I keep my ear to the ground for the latest rumblings of what's going on in different industries around the globe. Lately, I've been hearing more and more about the shipping industry and it's recent rebound.
The shipping industry had gone through some turmoil, along with every other industry during the financial crisis, with a decline in global demand resulting in a substantial capacity glut. This hit the shipping industry hard: the Baltic Dry Index (BDI)- which tracks day freight rates- fell to a 26 year low in 2012.
Since 2012, the shipping industry has seen signs of recovery on the back of global economies showing strong growth with consumer confidence rising along with demand. As such, the BDI has risen almost 200 percent this year.
My research within the shipping industry brought my attention to AmeraMex International Inc. (OTC: AMMX). AmeraMex supplies heavy equipment to many different industries, the fastest growing being the shipping industry. The company maintains an extensive line of equipment for the loading and off-loading of shipping containers from ships coming in and going out of ports up and down the West Coast of the United States.
With a market value of just $957,354 and trading at just .0021, AmeraMex might just be the most undervalued stock in the OTC with explosive potential for 2014 and I'll tell you how I came to this conclusion.
AmeraMex In November, the company reported third quarter revenues of $1.4 million, up 266% from their 2012 fourth quarter revenues. The company's fourth quarter revenues are expected to blow us away- with confirmed revenues of $3 million in the month of August alone. AmeraMex recently announced that it had submitted a $2 million equipment bid to a large U.S. port facility, but management is still waiting to hear confirmation on the bid's acceptance.
Here's the best part- they did all of this with a gross profit margin of 55%! Yes, you read that correctly. You don't have to have a P.H.D. in Economics to know that this rate is incredibly rare in any industry. How do they do this? AmeraMex has found a niche by providing companies with refurbished equipment, at a fraction of the cost from their competitors. Like most industries, this one is extremely price sensitive and AmeraMex has found a way to out due their competitors.
With a market cap under $1 million, revenues possibly breaching the $10 million mark, profit margin of a whopping 55%, and rumors swirling of a big announcement being made on the conference call in January- it's shaping up to be a great 2014 for AmeraMex.