China Recycling Energy Corp. (NASDAQ:CREG)

Trump Effect for China Recycling Energy Corp. (NASDAQ:CREG)?

China Recycling Energy Corp. (NASDAQ:CREG)

Is there a “Trump” effect at play with China Recycling Energy Corp. (NASDAQ:CREG)? Over 23 million shares have traded on a stock that has a daily average of under 22,000! CREG stock began the day at $1.27, yesterday’s close, then a steady ascent began until a high of $6.74 was established. What accounts for the massive volume and price increase? There is no news publicly available that could account for a volume increase of 1,391% or a share price increase of 350% – except, possibly, that the President of the United States did something today that could increase revenues for the Chinese company?

Prior to today’s price action, China Recycling Energy Corp. (NASDAQ:CREG) had a market capitalization of just $11.2 million. The company is in the recycling energy business in China. It designs, finances, constructs, operates, and transfers waste energy recycling projects to mid- to large-size enterprises involved in high energy-consuming businesses. It also provides waste gas-to-energy solutions comprising the waste gas power generation system that utilizes flammable waste.

CREG Stock Performance

CREG shares traded, adjusting for dilution, above $60 in early 2014. While the shares have had some large daily losses, today counts as the largest daily gain in years. Before today, CREG shares were down 15% year-to-date, and down 11% for the year. This month had offered a bit of a reprieve to the downtrend as CREG shares were up over 20% for that time.

EPS has been trending down for the past four years. In 2013, per share profits were $2.90, but by 2016 the company posted a per share profit of just $0.22. Of note is the listed cash position for the company – posted at $6.60 per share. Even considering today’s gains, the shares are still trading at a significant discount to the listed cash holdings.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Cadiz Inc. (Nasdaq: CDZI) Shares Benefit from Leaked White House Document

Cadiz Inc. – Nasdaq: CDZI

Reports of a leaked document from the Trump administration appear to be pushing shares of Cadiz, Inc. higher. CDZI, traded on the Nasdaq, closed yesterday at $12.70 and have reached $15.10 in morning trading.

The Orange County Register and Kansas City Star are reporting that a Cadiz Inc. aquifer project could receive fast-track approval. This would be consistent with President Trump’s stated goal of initiating new infrastructure projects to create jobs.

Cadiz Inc. is a renewable resource company based in Los Angeles that owns over 70 square miles of property with significant water resources and clean energy potential.

Since 2012, Cadiz Inc has reported annual sales of $300,000. Shareholders of CDZI have seen the last five years post negative EPS – a loss of $1.35 in 2015. One firm follows Cadiz and rates CDZI shares as a “Strong Buy” with a price target of $17.50.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

SNU View – Our Advice to President Trump: Focus on Price Transparency

As most financial professionals have offered their opinion on how to improve the American economy, we thought we would join in. So here is our advice to President Trump – focus on making prices transparent.

Most of the products and services we buy are priced by companies that perform cost analysis and price their product/service accordingly. That pricing formula takes many factors into account. The end user then decides if they are willing to pay the price in an exchange. But there are many hidden factors in the pricing process that need to be eliminated if buyers are to pay the firm the actual cost of the product/service.

An example – A consumer walks into a big-box retailer and pays $5 for a widget. What is not included in that price is the cost to taxpayers of the food/rent/healthcare subsidies that the big-box retailer’s employees receive from the federal government. That is monetized in our federal debt figures and paid for at a different time than the purchase of the widget – that expense is paid whenever that consumer pays taxes to the federal government.

To create an economy that is transparent and appropriately assigns expenses to costs, it is necessary to remove the laws, regulations, and tax breaks that place a financial obligation on consumers of goods/services at any other point than the point of sale. Will this bring about inflation? Yes. But it will also make our economy more transparent and transparency is key to managing a successful economy.

President Trump needs to simplify the way in which the government collects revenues and the different manners in which private entities receive benefits that can be monetized. In short – the President needs to force business to stand on its own and avoid any relationship that makes prices opaque due to government interference.

We acknowledge that there are areas which are critical to our national well-being and defense – agriculture for one. But let’s start with the easy ones first and see how far we get. There is a long list of subsidies that could easily be eliminated. Consumers will howl at the price increases but only because they forget that the old, lower prices were being added to our national debt – a debt which, if not addressed soon, can limit our ability to manage our economy.

Take the reins off American business by all means. But also, place the burden of conducting business squarely on their shoulders and not the national debt.

 

Our New Year’s Message – 2017 Will be Yuge!

Billions of people will say goodbye to 2016 and welcome in 2017 tonight. We will all (well, mostly) drink champagne, make our New Year’s resolutions, and then wonder how long they will last. In some years, events occur that we instantly recognize as being destined to become part of the historical record: 2008 – recession and market crash; 2001 – 9/11 terrorist attacks; 1999 – tech bubble burst; 1986 – stock market crash; 1963 – the assassination of JFK. Other years do not get such star billing except when being discussed in hindsight.

We believe that 2017 shall go down as a defining historical moment in governance – it has the potential to be “Yuge”. Millions of years ago, when tribes were being formed amongst our knuckle-dragging ancestors, the most physically gifted took the role of tribal leader. If you aspired to become a tribal leader, you had one path – kill the current tribal leader. As the centuries went by, we started walking more vertically and tribal leaders transformed, by introducing the concept of reward in exchange for support, the position into a monarchy – a framework of governance and leadership that could be passed through to heirs. No longer could you simply hit someone on the head with a rock and become the new leader, now you had to defeat the King’s, or Queen’s, army.

That form of governance continued for thousands of years until the famed “shot heard round the world”. The American colonies decided to rid themselves of an allegiance to a crown they believed did not have their subject’s best interests in mind. Luckily for the world, the leaders of that armed insurrection were learned men and formed a constitutional republic that was uniquely defined by the orderly transfer of power based on elections. Enter the United States of America and the age of democracy.

Until 2017, America’s leaders had been plucked from the ranks of people that had previously been receiving a government paycheck – legislative or military leaders. Donald Trump has changed that dynamic for the first time since George Washington. Voters chose a President that has never worked in government, but successfully campaigned on a platform of bringing corporate boardroom skills to the Presidency. We have no illusions that running a corporation, no matter its size, is different that running a government. We also have no illusions that our current government is in dire need of the budgetary and negotiating skills that are found in America’s corporate boardrooms.

2017 will be remembered for being a key step in the evolution of governance. From tribal leader, to monarch, to experienced legislative or military leader, to corporate leader. This is an experiment. It could turn out good or bad and most likely be somewhere in-between. But on this first day of 2017, it should be recognized that this year will go down in history as the year voters gave the most powerful office in the world to a person without a history of working in government. The voters rejected tradition and gave the office to a person based on the promise of implementing their corporate leadership and skills. We wish Mr. Trump all the success he can bring us. And if successful, the world shall see more of his kind. But he will always go down as the first.