Phoenix Associates Land Syndicate (PBLS.pk)

Introduction:

Founded in 1978 as a gravel mining company, Phoenix Associates Land Syndicate would eventually find itself bankrupt in 2001. Yet as the name suggests, the Company would rise again to rejuvenate its enterprise having acquired over 20 companies in the few short years to follow becoming a vertically integrated operation that presently (as of 6/30/07) retains $131 million in total assets. Pertaining to the present fiscal year, Phoenix reported to make $4.88 million in pretax income off of $14.6 million in gross profit for the six months ending June 30, 2007. As of the ending share price of October 4, 2007 Phoenix held a current market capitalization of $13.4 million.

Phoenix Associates Land Syndicate (PBLS.pk) - $0.0055 (10/4/2007)

2,429,362,328 O/S (10/4/2007) – according to Transfer Agent.

2,500,000,000 A/S (10/4/2007) – according to Transfer Agent.

Market Capitalization (fully diluted at current share price): $13.75 million

2007 Mid-Year Financial Results

Nevada Secretary of State Company Listing

Press Releases

Why this is a bad investment:

To first understand this company, it’s a good idea to understand why this company is a bad investment. Having been listed under the Pink Sheets, Phoenix has long evaded the transparency demanded by its investors while simultaneously reassuring that its commitment to open its fiscal doors was imminent. Yet in a progressive step to an otherwise futile word-game, Phoenix recently ungagged its Transfer Agent and publicly released internally-prepared financial results.

Phoenix’s share price has also dwindled over recent months in light of high pressure dilution. Over the course of a little more than a month, PBLS stock was diluted approximately 10% (250 million shares) on a daily basis casting a heavy sell pressure over the stock. Such dilution is unnerving to weary penny stock investors who fear fraud. Even with fraud ruled out of the picture, such an action could be equally disturbing when wondering why the company would need the cash it rose through dilution. As of 9/28/2007, the dilution has stopped for now.

In light of the last fact, it's noteworthy to mention that cash flows appear to be a problem for the company. This may be reasonable considering the expenses it must incur to expand its operations. The recent press release regarding the sale of Best AeroNet also vindicates this assertive deduction that the Company has greater need for cash on hand than venturing into another channel of revenue. Based on the rapid expansion of Phoenix as it continues to acquire companies, it is possible to believe that overexpansion may have led to difficulties in company consolidation. It is also possible that the Company allowed for loose regulations over revenue collection thereby clogging the pipelines of cash flow.

Legal ramifications behind the Murphy Sand & Gravel pit, a vital money-maker for the Company, may ultimately strip Phoenix of an important asset. The most recent update on the court case was a blow to the Company, although it appears that the asset itself will be operational and retained until further litigation is settled. An appeal process may again vindicate Phoenix, who has already won one appeal regarding the case.

Last of all, the need for verification remains a problematic issue albeit less of a problem than most penny stock companies. In the case of Phoenix, specific verification for contracts and third parties (rather than proof of the company’s own divisions and assets) remains elusive. Of greatest concern, the recent $6.6 billion revenue contract with Komex has been displayed with little proof (not “no proof”) of existing despite the massive size of the contract itself. Despite the seemingly absurd amount of revenue involved, there has been hope in the fact that some who have visited the Company have personally met the newly added individuals who were involved with this contract. Nevertheless, investor doubt has helped tumble the share price despite the promise of a such a lucrative possibility.

Why this is a good investment:

Comparative Advantages:

In my opinion, the Company has two major comparative advantages which reside in the Murphy Sand & Gravel pit and the Best Jets companies respectively. After Hurricane Katrina hit New Orleans, MS&G became the region’s new gold. With all the re-construction that will be necessitated in New Orleans alone, sand and gravel demand has skyrocketed and ought to stay well above normal levels for years to come. Residing right outside of New Orleans, the MS&G pit that was once evaluated to be usable for the next 20 years now looks to be exhausted in less than half the time. The pit’s location significantly reduces and likely nullifies the impact of any competition that may have existed prior to the disaster.

Best Jets offers another unique comparative advantage in an entirely separate industry. In summary, the advantage could be found in this press release (http://www.pbls.biz/pressrelease_content.asp?prid=79), and is highlighted by this quote: “Recently, General Electric announced a “Propulsion Modernization Program” (PMP) for these engines that double the time between overhaul (TBO) from 5,000 to 10,000 hours and the “Hot Section” inspection interval from 1,000 to 2,000 hours. Best Jets has been working closely with General Electric to become the only engine shop authorized by GE to perform the modernization upgrade on engines in the civilian market. GE originally developed the PMP for the US Air Force, where these engines (under the moniker of “J85”) provide propulsion for the T-38 Jet Trainer. They plan to keep the engine in service though the year 2040.”

Vertical Integration Model:

Phoenix’s business model appears to be one of rapid growth through acquisitions, diversified revenue streams, and yielded synergistic returns through vertical integration.

As seen through companies in industries varying from Mining, Trucking, Gas & Oil, Construction, Real Estate, Aircraft Refurbishment, and etc., Phoenix has managed to spread the risk of its revenues while simultaneously utilizing its own resources to reinforce itself. It's for this reason that Phoenix’s trucking company transfers its owns sand pit’s payloads, why its leisure construction division can enhance its real estate, why its concrete crushing facility will receive a steady flow of raw material from its own mines, and even why traveling between waypoints can be reduced through use of its own private jets. These are just some of the ways that Phoenix is able to help sustain itself and enjoy the benefits of synergy.

Verifiable Indications:

What appears on paper means nothing without the proof to provide reasonable belief that everything is as it’s said to be. This is always the case with pink sheet stocks. Yet, we are fortunate to have willing shareholders who go beyond the call of duty to be reassured of their investments. In the case of Phoenix, many investors have visited various facilities over the course of the past few years to verify ownership and operations.

Here are some photo collections from one shareholder: http://home.comcast.net/~new.p/pblsone/

Just as important as seeing the actual operations, having the company commit to what it says it will do is vital. When it came to a share buyback more than a year ago, the Company followed through on its promise. Checks were sent out to investors who followed through with the company’s buyback plan.

Conclusion:

With a fully diluted market capitalization of $13.75 million at the current price ($0.0055) and a "likely" (I use this term because just maybe this company really has been a fraud for 30 years…) true valuation of the Company’s $131 million, there is nothing that I can say that would emphasize how undervalued this Company is at this price level. With a likely positive net income of $4.88 million for half the 2007 fiscal year, the Company has a share price of 1x P/E. With a mere P/E ratio of 5 as which might be considered reasonable for the Pink Sheets, the Company’s stock should be valued at $0.02/share. Given its precedence, it is highly likely for this to occur in due time.

ALL of this article has been taken from a very conservative outlook, having considered full dilution and the mere “core operations” of the Company (that have been commonly accepted through reasonable belief to be in existence). It neglects the one factor that ought to favorably tilt the scale of risk involved: The recently enacted/signed/proposed (pick one) contract with Komex which was valuated to be worth $6.6 billion over 5 years time. Even if the contract is made null, the possibility for future contracts is left open. However, it was the announcement (rather the lack of follow-up) of this contract coupled with dilution that brought about the most recent downward spike of the share price. The very share-price floor that had been so perfectly drawn less than a few months ago was broken briefly on Oct 3, only to be re-established on Oct 4.

Nevertheless, taking this possible contract out of the question, we are left with the very probable truth that the Company’s share price must ascend once again on a reasonable valuation of the assets and deals not currently in question.

Suggestion: Buy.

Companies Owned by Phoenix :

(courtesy of the I-HUB message board)

Phoenix Associates Land Syndicate, Inc.: 504 Water Street Madisonville, LA 70447
http://www.pbls.biz/
ProGas, Inc.: 226 East Gibson Street Covington, LA 70433
http://www.progasinc.com/
Sam's Oil Country Inspection Services, Inc.: 1509 Hwy 135N Kilgore, TX 75662
http://www.iedds.com/
CM Ideal Energy Services, Inc.: 1509 Hwy 135N Kilgore, TX 75662
TCB Properties U.S., Inc.: 1534 Scenic Gulf Drive - Suite 13 Miramar, FL 32550
3-D Builders, Inc.: 504 Water Street Madisonville, LA 70447
3-D Creations, Inc.: 504 Water Street Madisonville, LA 70447
Bayou State Trucking, Inc.: 504 Water Street Madisonville, LA 70447
Ann Arbor Pool Builders, Inc.: 522 North Maple Rd Ann Arbor, MI 48103
Mid-South Resources, Inc.: 2025 Regency Road - Suite 201 Lexington, KY 40503
Rome Oil & Gas, Inc: 2025 Regency Road - Suite 201 Lexington, KY 40503
Best Jets Engines, Inc.: 3743 Airport Drive Denison, TX 75020
Best Jets Airframe Services, Inc.: 3743 Airport Drive Denison, TX 75020
Best Jets Sales & Management, Inc.: 3743 Airport Drive Denison, TX 75020
Jet Makers, Inc.: 3743 Airport Drive Denison, TX 75020
Murphy Sand & Gravel, Inc.: 42435 Honey Island Swamp Road Pearl River, LA 70452
Great Lakes Pool Plastering, Inc.: 522 North Maple Rd Ann Arbor, MI 48103
http://www.annarborpools.com/temp48/Home.aspx?did=1328
Noble Jet, Inc.: Fort Lauderdale Executive Airport (FXE). (2/14/2007)
Southern Concrete Crushing, LLC.: 504 Water Street Madisonville, LA 70447 (6/6/2007)
Superior Avionics: Fort Lauderdale Executive Airport (FXE). (7/10/2007)
Jet Aviation Services, Inc.: Bob Hope Airport Burbank, CA. (7/11/2007)
Creston Aviation: Fort Lauderdale Executive Airport (FXE).
http://www.crestonaviation.com/ (8/13/2007)
Able Building Company, Inc. (9/25/2007)

Other Companies Either Owned or Related to Phoenix:

Best AeroNet, Inc.: 3743 Airport Drive Denison, TX 75020
http://www.bestjets.aero/
http://www.bestaero.com/
http://www.texomajet.com/
Bimini Island Air : Fort Lauderdale Executive Airport (FXE).
http://www.flybia.com/
True North Aviation: Fort Lauderdale Executive Airport (FXE).
Tchefuncte Harbour Townhomes.: Madisonville,LA 70433
http://tchefunctemarinatownhomes.com/index.htm
Great Lakes Pool Plastering, Inc.: 522 North Maple Rd Ann Arbor, MI 48103
http://www.annarborpools.com/temp48/Home.aspx?did=1328
Leisure Direct Inc.: 1070 Commerce Drive Perrysburg, OH 43551
http://www.leisuredirectinc.com/
Murphy Sand & Gravel, Inc.: 42435 Honey Island Swamp Road Pearl River, LA 70452
Rock Concrete, LLC.: 504 Water Street Madisonville, LA 70447
United Soils of Louisiana: 504 Water Street Madisonville, LA 70447
PBLS LLC.:] 504 Water Street Madisonville, LA 70447
Bayou State Holding Corp.: 2 North Bonita, Madisonville, LA 70447
Clifton James & Associates, Inc.: 504 Water Street Madisonville, LA 70447

Advanced Growing Systems Inc. (AGWS)

Advanced Growing Systems Inc. -- AGWS.pk ($0.65)

http://www.agsincorporated.com/

~22.5 million O/S
Float: ~5 million shares


Introduction:
A parent company of two subsidiaries, Organic Growing Systems and Advanced Nurseries Inc., AGWS is a vertically-integrated wholesale distributor of organic fertilizer and nursery products operating primarily in the booming Southeastern U.S. Poised at an annual growth rate of 100%, AGWS retains a positive net-income, holds audited financials, and has obtained its first institutional investor. Despite a 2007 financial outlook of ~$20 million in revenue and a rough 30% gross profit margin, AGWS is an unknown in the investing community.

Notes:
1) Growing demand for organic fertilizer
2) Fastest growing market in the South East U.S. for landscape products
3) VERY low trading, about 1-10 trades a day.
4) Pump-free PR's (averaging 1 monthly PR to update revenues received)
5) Vertically integrated model
6) Expanding exponentially (started last year, now has 3 nurseries & recently bought a manufacturer for its organic fertilizer)
7) Company's brand of fertilizer reduces the amount of water needed by nearly 2/3

A Tale of Two Sinners

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IMPORTANT !! Before reading, refer to this post: Keeping an Eye on the Sinner

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ONGO (On The Go Healthcare Inc) – OTC:BB

Share Structure:

100 million A/S

Notes:

1) Has reverse split and diluted at least once – VERY BAD
2) A Multi-Industry Value Added Reseller (VAR) catering to many Fortune 500 companies
3) Has made progressive steps to reduce operating expenses and improve synergy through organic growth.
4) Has had increasing revenues through aggressive acquisitions with a renewed company focus – technology.
5) Has recently eliminated debt prematurely.
6) At 100 million shares outstanding (full dilution) at $0.01, the company is valued at a market cap of $1 million. Highly UNDERVALUED (recall the $30 mil+ in annual sales).

Suggestion:

This one is still falling like a rock, and justly so. The CEO will not hesitate to squash investors in order to inch the company towards profitability. Nevertheless, the synergy and organic growth that ONGO’s concentrated subsidiaries ought to yield over the next few years will likely lead the company to profitability and beyond. This is based on the inevitably growing technology sector and the loyal company clientele. Watch for signs of profitability over the next year and cautiously decide whether to get in. At a $1 million market cap (full dilution, in theory), the company is a bomb waiting for the right time to go off… if it ever goes off.

MTTG (Material Technologies Inc) – OTC:BB

Share Structure:

82 Million O/S (3/27/2007)
106.83 Million O/S (checked on Yahoo! 7/25/2007… might be wrong, otherwise its massive dilution)

Notes:

1) Recent LA Business article
2) A Good Overview by Larry Oakley
3) “The world’s only non-destructive testing device able to find growing cracks in bridges as small as 0.01 Inches in length & even under the surface.”
4) Has been in development for 10 years, and has FINALLY reached marketing
5) Has received first contracts with a state DoT, several state DoT’s have expressed interest
6) Technology has the potential to expand beyond bridges (railways, airplanes, etc)
7) Stock has reverse split and been diluted many, many times – VERY BAD

Suggestion:

MTTG’s potential is amazing, but it has taken years of walking over investors in order to reach a point where the product has become marketable. Since the government bureaucracies will be the main buyers of the technology initially, expect huge lags to get this ball rolling. It’s difficult to get a read on how big the market for this product is, but it is clear that it has major potential for years on out in light of an aging system of transportation infrastructure. Watch for contracts that will make this company profitable. Also watch for steady share price turnaround indications prior to committing.

Industrial Nanotech, Inc. (INTK.pk)

Introduction:

At present, Industrial Nanotech revolves around its flagship product of Nansulate, a brand-named line of 13 coatings or wrappings that offer superior insulation capability utilizing the advancements of nanotechnology. The majority of the manufactured products specialize as an ultra-thin coating (like paint) offering solutions to the needs of not just thermal insulation, but also corrosion-prevention, mold-resistance, and lead abatement in the form of a one-stop comprehensive product.


1-Year Chart

Industrial Nanotech, Inc. -- INTK.pk ($0.18)

~165 million o/s
250 million a/s
~ 42 million share float

[note: 2407 Shareholders of Record as of 5/11/2007]

Patent Information


It has been a little more than 2 weeks past a year since I first discovered Industrial Nanotech, having bought my first shares at a near-bottom of $0.07 before graciously being rewarded a 200% return in too short a time. I properly flipped at 4 cents shy of the high in September '06 and rebought back in at 18 down through 13 cents and have held tightly since. Even in light of its drops, I knew that this was a company that fit precisely into my business model based on the technology's comparative advantages alone. Remember that here at Investing Pennies, we seek long-term investments of companies that have the capability to survive the market conditions of the lower exchanges and that offer distinct comparative advantages that allow it to be a significant competitor in its respective industry.


Comparative Advantages (of the company):
1) Superior product that addresses an untapped market (READ this section - IMPORTANT)
2) Diversified Industry Demand
3) GLOBAL distribution network
4) Highly developed Research Facility Partnerships

Notes for each comparative advantage:

1) Whereas most nanotechnology companies are still venturing through their R&D phase, INTK offers a nanotechnology product (rather 13 specialized products) that in essence tackles a boring, but essential product used throughout the economy – Insulation. In particular, it addresses a relatively untapped market of “corrosion-under-insulation” (CUI), a global problem that has accounted for literally hundreds of $billions of dollars in damages alone. Normal insulation actually induces corrosion by trapping water inside of the protected surface. Recall the recent Alaskan oil pipeline disaster? Thank CUI for that. But before you disbelieve that INTK could ever play a role in addressing such a problem, consider its current $5.8 million contract with the world’s 8^th largest Oil & Gas player, PetroBras S.A. As of a very recently released press release, PetroBras has asked INTK to come to the company's HQ in August to talk of additional projects (likely to be much bigger than the current project).

So what’s the big deal?

Nansulate’s superior advantage lies it its thickness (hence the nanotech relevance), or rather lack of. The ultra-thin attribute of Nansulate is critical to its application on surfaces previously untouched by insulation, allowing it to be a more efficient and flexible form of insulation than its modern counterparts. Aside from this, Nansulate is non-toxic (safe enough to receive a certificate that allows it to be in contact wit food products) and is so versatile that is can be sprayed on an applied surface during its application process. Going even further, Nansulate is translucent, allowing for structural damage to be seen without having to first tear apart the insulate or use an ultra-sound device (as is currently used by the oil & gas industry) to peer beneath the layer on the outside. Most importantly, Nansulate is able to provide comparable (and tests have even suggested much superior) thermal insulation capabilities at a FRACTION of the thickness of modern products. As a double threat, Nansulate is also hydrophobic which allows for the corrosion & mold resistance. As of today, there is no product in the world that is able to compete with Nansulate. Due to its superior advantage of being ultra-thin, and there are also very few products that can address CUI as Nansulate could. Most of those other "solutions" make it very difficult to reach the structure surface after being applied (think of a caulking material & the like) and are much more difficult to use.

2) Industrial versatility & flexibility is another KEY to INTK’s future success.

While the Oil & Gas sector is major player right now, understand it is not the ONLY player. Nansulate has already developed interest or contracts with companies varying in the following industrial sectors: Food, Furniture, Refrigerated Trucking, Textile, Construction, Alternative Energy, Paint, Military, Shipping, and my personal favorites…. Electronics, and Automobiles (Toyota).

Why are the last two important? Because they illustrate the niche market capability that INTK brings to the industry– EXPANDING THE USE OF INSULATION IN WAYS THAT WERE PREVIOUSLY IMPOSSIBLE. The ultra-thin characteristic of nansulate allows it to be used in places previously unfit for insulation. Insulation on engine parts? Unheard of! But Toyota’s NASCAR team has been using it, and INTK was quick to create Nanoboost for the consumer to save energy & maximize horsepower. How about electronics? We know nothing about this yet, but I can only imagine. Does the cell phone get hot in your hand? Nansulate could probably solve that. Computer system cooling problem? Nansulate.

3) The Global Distribution network is the cherry on top of the cake! Nansulate has started at the very top, opening its doors to the world rather than restraining itself to the US exclusively. As the word continues to spread, this will snowball very fast because of this. Most of our announced projects have come outside of the US. A manufacturing facility is being created in Italy (in order to reduce shipping costs around the world). We have distributorship contracts in a good chunk of the world. Here’s a map listing all the current agreements (blue are the agreements, green are negotiations, red is interest) that was given to me by the company several months ago:

4) I’m going to be brief on this. Our research is conducted in the U.S. Government’s Center for Integrated Nanotechnologies (CINT). However, on top of this, we are now working (according to the Feb 1. 2007 PR) with the Battelle Institute – the world’s largest independent research and development organization (w/ 120 locations worldwide). Battelle conducts $3.7 billion in R&D each year.

Concerns:

I only have one concern for this company. Dilution. The company has been diluting at a steady rate in order to raise funds for continued operations. The current O/S is approximately 165 million shares, however the degree of the dilution has been suspect seeing how it could jump from 75 million to 136 million from 2005 to 2006. How long will this last? I would say not very much longer given the immense decline in the rate and in light of revenues beginning to really take off. 2006 revealed a mere $400,000 in revenues resulting in a net loss of $2.9M….. the Petrobras contract alone will reveal $5.2 million in revenue bringing in cash flows that were likely near non-existent the year prior.

Conclusion:

Taking a VERY conservative position of assuming 200M o/s, the current market cap is a mere $36 million. At full dilution of 250M o/s, the current market cap is $45 million. Be mindful that there is a relatively low float at 42 million shares. It is impossible from our standpoint to know what the earnings will be in the near future due to the start-up nature of this company. However, when considering progress that could easily reveal $20-50 million in revenues by the end of next year… the rapid growth rate ought to give way to a high multiple, even on the PK’s. Simultaneously consider the current sideways charting trend of this company thereby illustrating a high resistance to PK market gravity. With high’s that exceed $0.30/share on news alone, INTK remains undervalued at its current $0.18 price tag.

Personally, I plan to buy more in intervals when/if the stock drops below $0.17.

As of right now, this company is entirely news-based. There are several possible contracts in negotiation that we are aware of. I am not suggesting you buy now on the possibility of those announcements coming out soon (which will skyrocket the stock), but I am suggesting you find a base holding that you can hold long to for the next two years at a minimum.

This company is a true Penny Stock Investment.

US Sustainable Energy Corporation (ticker: USSE.pk)

Reminder: I hold both USSE & SSTP in equal regard despite the lower float of SSTP and initial progress of SSTP. Remember that USSE holds a good amount of SSTP shares, and that both companies have a share structure that are relatively equal in number.

UPDATE:

Today's press release deserves more attention than it humbly made itself out to be. Despite circulating rumors of SSTP's anticipated biodiesel shipments amongst the forums, the fact was explicitly stated today that such shipments would commence within 72 hours. THIS IS A MAJOR MILESTONE. Like most longs, we have waited for this day since October '06. USSE/SSTP will finally be a company making revenues, at a presumed accelerated rate at that.

USSE has had a very sketchy past. When it first went public via reverse merger the company's market capitalization soared past a whopping $400 million ($0.70 x ~600 million O/S) on the CEO's comments on the company's capability to make billions of dollars in the years to come through its revolutionary technology. With no revenue to show for it to this very day, that was several hundred million dollars too much. Production delays have since hampered efforts for the company to survive the death plunge down to ($0.06 x ~2billion o/s after a 1-1 split) ~$150 million market cap.

What remains surprising is the fact that the technology has been proven to work through many verifiable eyewitnesses and through third-party lab results. In the penny world, there are few who can say that this ship has sailed given the large market capitalization that remains. Nevertheless, in my opinion, there are fewer that truly understand the power & worth of the technology this company retains.

Like CEO John Rivera has often stated, USSEC has no competition in this already-lucrative market of alternative energy. When assessing the future of the industries that the USSE/SSTP duo will soon one day lead, the current market capitalization does little justice despite its massive size in relation to most penny stocks. (Combining USSE & SSTP reveals a market cap of ~$250 million.)



Assuming that USSE will eventually vindicate itself to the investment community to be the possessors of technology that can change the industry...

Recognizing the $0.06 floor that has been roughly established over the last month...

Considering that revenues will begin to flow within 3 days...

Anticipating medium legal obstacles to be encountered (3 possible cases are known)...



It is in the opinion of this investor that USSE continues to remain undervalued at this point in time despite the negativity that remains both unsettled and on the horizon. With the right press release catalyst, I fully see this one hitting at least $0.08-0.10 within a few weeks time.




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Top 5 Recommendations (OVERALL, Long Perspective):

1) PNMS
2) USSE/SSTP
3) INTK
4) PBLS
5) AGWS


Top 5 Recommendations (Current Undervalued Plays):

1) USSE/SSTP
2) PNMS <-- With $0.0011 floor, $0.0013 resistance, and $0.006 short term possibility, very cheap with the right news that is fully anticipated anticipated
3) BIDZ <--former OTC:BB play, now on NASDAQ, growing quarterly revnues, low multiple
4) NMKT <-- bottom out play
5) GBDX <-- highly speculative, little information available.