Updates & New Stocks – January 25, 2014
This week we have updates on Global Minerals (CTG) and Enterprise Group (E) and we introduce an exciting new small cap stock called IsoRay Inc. (ISR)
As we wrote last week, good reputations still go a long way. Despite tough market conditions for commodities companies, Global Minerals (CTG – $0.05) will most likely be able to raise more than the $3 million it was initially looking for. It announced this week that it increased its private placement to $3.5 million due to strong investor response. We even heard that most existing institutional shareholders will participate in the financing.
Concurrent with the close of the financing a 1-for-5 reverse split will be executed. A maximum of 14 million units will be offered in the financing. Each unit will be priced at $0.25 and will be comprised of one post-split common share and one share purchase warrant, exercisable to purchase one post-split common share for two years at a price of $0.35.
Global will use the proceeds to collect a bulk sample from the Strieborná vein to conduct detailed metallurgical tests to determine the exact antimony content. In order to reach the vein, miners will have to make a 100 meters long tunnel, starting from the existing underground tunnel at level 6, located approximately 180 meters below surface.
Enterprise Group (E – $0.97) is rapidly integrating Hart Oilfield Rentals, which it recently acquired for $22.6 million.
Hart is a full service oilfield site infrastructure company, providing its customers both site services and equipment rentals. Hart’s equipment fleet consists of approximately 1,500 owned pieces and an additional 500 pieces that have been rented in order to fulfill demand. This fleet provides on-site support for oilfield drilling and completion operations, and includes both traditional well site equipment and Hart’s ‘combo’ equipment, modular designs that have been proven to significantly increase site efficiency.
During its most recent fiscal year, Hart generated $22.9 million of revenue and $7.2 million of EBITDA, and has grown these metrics at CAGRs of 22% and 37%, respectively, over the past four years.
Enterprise completed the Hart acquisition on January 3, 2014, and has already made significant advancements towards the integration of this highly complementary new business unit. For example, Hart’s seven top executives have all agreed to stay on board of the new entity, which demonstrates the confidence they have in the new parent company. Additionally, Enterprise is finalizing the purchase of new additions to Hart’s fleet of modular units. In total, Enterprise expects to deploy a total of $9.4 million towards developing this fleet. The Company’s work to date has confirmed its original estimate that a full year’s deployment of these new units could increase Hart’s annual revenue and EBITDA to $29.9 million and $12.0 million, respectively.
Leonard D. Jaroszuk, Enterprise’s President and Chief Executive Officer stated: “We expect the addition of Hart will be both immediately accretive and create multiple benefits for our business. During 2013, Enterprise demonstrated its ability to successfully integrate acquisitions without disrupting growth. A key component of our integration strategy is our ability to retain and develop leaders within the businesses we acquire.”
Thanks to a couple of previous acquisitions, Enterprise’s nine months results, for the period ending September 30, 2013, skyrocketed. Revenues in the first nine months of 2013 doubled to $23,737,000 compared with $11,856,000 in the same period last year.
For the first nine months of 2013, net income was $5,572,000 compared to $656,000 in the same period last year, an increase of $4,916,000. And earnings per share for the first nine months ended September 30, 2013 was $0.08 compared to $0.01 in the same period last year.
A final company for this week that you might want to take a look at is IsoRay Inc. (ISR – $0.75), a medical technology company and innovator in seed brachytherapy and medical radioisotope applications. The company recently received FDA clearance to use its liquid cesium for use in IsoRay’s GliaSite radiation therapy system, a balloon catheter device used to treat certain brain cancers.
IsoRay’s CEO Dwight Babcock noted, “Liquid cesium is IsoRay’s newest innovation and offers a number of advantages in the treatment of brain cancers. Cesium-131’s short half-life and energy provide a specified dose of liquid radiation source that is placed using the GliaSite radiation therapy system in the areas most likely to contain cancer cells after surgery for brain tumor removal. This form of radiation is less likely to damage healthy brain tissue than other alternatives and the ability for the tumor to recur is greatly diminished, improving patient survival and quality of life. Liquid cesium can also be used jointly with chemotherapy and external radiation.
IsoRay is the exclusive manufacturer of Cesium-131, which is the first new isotope to be available in seed form for brachytherapy in approximately 20 years. Cesium-131 allows for the precise treatment of many different cancers because of its unrivaled blend of high energy and its 9.7 day half-life (its unequaled speed in giving off therapeutic radiation).
The company’s CEO recently presented the positive results being realized in treating various brain cancers, meningioma tumors, lung cancer, gynecologic cancer and prostate cancer with Cesium-131 products at The Annual Meeting Of The Congress Of Neurological Surgeons.
Cesium-131 is FDA-cleared and holds a CE mark for international sales in seed form for the treatment of brain cancer, prostate cancer, lung cancer, ocular melanoma cancer, colorectal cancer, gynecologic cancer, head and neck cancer and other cancers throughout the body. The treatment can be deployed using several delivery methods including single seed applicators, implantable strands and seed sutured mesh, and several new implantable devices. IsoRay also distributes the GliaSite radiation therapy system, used to treat brain cancers.
Late last year, Isoray announced that the University of California and John Muir Medical Center had started using the company’s sutured seeds in mesh to treat newly diagnosed and recurrent cancers where other treatments have previously failed.
Although IsoRay received FDA approval, this is still only a $30 million company, which may make it a buyout candidate for some cash rich biotech company. Alternatively, when sales continue to improve the coming quarters, the stock price is bound to benefit as well.
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