Monthly Archives: July 2012

Quest Water (QWTR): Saving Lives In Africa

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Believe or Not: Angola- The Highest GDP Growth in the World

Think China with it’s 8.5% GDP growth is still the highest in the World? Think again. The politically stable country of Angola, located in the Southwest corner of Africa, has 11% annual GDP growth and currently holds the title of the country with the highest GDP growth on Planet Earth.

This former Portuguese Colony went through an intense Civil War for 27 years- 1975 to 2002. Angola has vast natural resources - mineral and petroleum reserves. This country is the 2nd high oil producer in Africa and the 5th largest diamond producer in the world. The Heritage Foundation estimates Angola is the single largest supplier of oil to China.

Despite having double digit GDP growth since the end of its Civil War, Angola has one of the lowest average life expectancy rates in the world, and one of the highest infant mortality rates.

Angola has about 19 million people. The country adopted in new constitution in 2010, and is trying very hard to improve it’s rather poor ranking in human rights and income disparity. The new constitution gave more power to the Presidency. The President comes out of the ruling party, and there are elections coming in September.

As part of effort to improve the quality of life for Angola’s citizen’s, the government adopted the “Water For All Program” in 2007, and has been seeking solutions to provide quality drinking water for the country’s vast rural populations. The “Water For All Program” has been funded with $1 BILLION by the government- yes- that’s $1 Billion with a capital “B”.

The subject of today’s edition is new idea Quest Water Global (QWTR)- Quest was given a mandate from the Angolan government to develop a water purification system that will clean contaminated river and lake water in rural areas where power sources can’t be found.

Quest has answered the call and delivered two systems in 2012- one of which is installed and working flawlessly using solar power.

For your consideration: Quest Water Global Inc (OTC BB: QWTR):

 

Quest Water (OTC BB: QWTR): Delivers The Solution

The say one picture replaces 1,000 words. Here’s 2 pictures - I’m saving you reading 2,000 words. These pictures appeared in an article from Vancouver’s North Shore News on Sunday, June 17th.

You are looking at a picture of the world’s first functioning AQUAtap Community Drinking Water Station, located in Bom Jesus, Angola. It’s was installed this past March. This unit produces 20,000 clean liters of water per day, and requires no electricity, fuel, or chemicals of any kind. The unit produces no waste or harmful by-products.

The water, drawn from a nearby river, passes through a series of self cleaning filters, ultraviolet disinfection, and then goes into one of 2,000 liter holding tanks. Prior to dispensing to the end user, the water passes through one more ultraviolet filter. The unit runs on solar power.

The cost of the unit is $150,000. Quest plans to manufacture in Angola, which would reduce the cost to the Angolan Government to $120,000-with a 50% gross margin for QWTR.

QWTR is working on a partnership with the Angolan Government under the Water For All Program that initially called for 275 units. After the success of the initial installation, the two sides are talking about potential orders for thousands of units.

Other African countries have expressed interest as well- specifically Tanzania and Mozambique.

 

The Eye Opening Economics

The economics of the system are eye opening and impressive. Consider these numbers:

  • Imported Bottled Water costs $2 to $3 per liter
  • Local Bottled Water costs $1 per liter
  • Water from the AQUAtap solution costs $.0023 per liter- that’s 2/10ths of one cent per liter.

Pictured here you see Dr. Kiala Ngone Gabriel, the Angolan Secretary of State for Industry. Dr. Gabriel performed the dedication ceremony back on March 16th, and is spearheading efforts within the government to go into mass production of the AQUAtap units.

All of Africa is now taking notice of this new and revolutionary technology. This past Thursday QWTR disclosed it had received a Letter of Intent from the African Development Bank to finance the build out of a production facility in Angola.

An investment of $5.5 to $6 million would be required for the first facility, and this loan would cover the cost of construction, inventory, and working capital.

This news was big enough to be picked up by Bloomberg/BusinessWeek- which inevitably bring a larger audience to the company and more importantly to the stock.

Click Hereto read the article, or go to:

http://www.businessweek.com/news/2012-07-26/quest-water-seeks-afdb-funds-for-water-from-air-in-angola

 

The Technical Picture: Headed Higher on Higher Volume

Lots of factors are working in favor of QWTR. As you can see from the chart, volume has been picking up of late with a big surge three days ago in conjunction with the corporate update that contained the news about the funding Letter Of Intent with the African Development Bank.

Goldman Sach’s recent research report, referencing Water as the Oil of the 21st Century has investors seeking ideas in this arena.

The market is beginning to price the strong possibility of a large order and or agreement to purchase thousands of units from QWTR as they can be produced- and since they can be produced in their own country, this becomes an opportunity for the Angolan Government to produce both clean water and new jobs for its citizens.

With one in five Angolan children dying from exposure to contaminated drinking water, the need, amplified by the coming elections, puts QTWR in a position where positive events might be developing sooner rather than later.

The stock is also trading in an unquestionable up trend (see the green arrow). It will keep going higher until proven otherwise.

When I started studying this company, I was so impressed with what I read I began to accumulate the stock.

At present, I own 19,500 shares I picked up last week at an average cost of $1.2085. The stock closed at $1.23 on Friday, so it’s up less than 2 cents over the level I own it at.

I’m hoping the up trend continues, and I hope it accelerates with either news or more recognition of what the company has accomplished. I’m looking for the stock to trade into the $1.75 to $2 range in the next two to four weeks.

My suggestion would be to accumulate this one right up to $1.30, with a $1.10 SSL (suggested stop loss). I’m looking to take a full or partial profit in the $1.75 to $2 range. I also reserve the right to buy and/or sell QWTR at any time without prior notification.

If you liked getting out in front of the big volume surges in LUXR, VRNG, and BRFH, I suggest you take a hard look at this idea. I’ll be following this one for some time, expect updates and more information.

A reminder: Catch me live on TV every Monday from 12 to 2PM eastern.

Simply go to www.bigbizshow.com, and click on the “Watch Us Live” button. I’m the guest host on the show every Monday.

Home Page : www.otcjournal.com

Email Questions or Comments To: [email protected]

 

 

 

Vringo (AMEX: VRNG): The Big “D” is Imminent

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I thought it might be a nice sleepy summer for VRNG, and we could accumulate the stock in the mid $3 range. We will hopefully see it down there again soon, so you can pick it up at a more reasonable level. The stock was up there close to $4.50 yesterday, but today closed at the $3.72 level- so we are headed the right way if you don’t own it.

Back on July 19th VRNG closed its acquisition of Innovate/Protect- which means it’s game on as VRNG goes to court, armed with all the old Lycos technologies in its IP portfolio. In its SEC filings, VRNG describes the transaction as a “reverse merger”- meaning the assets and business of Innovate/Protect now become the primary direction of VRNG. That business is the business of suing the likes of Google, AOL, Target, and a few other giant names. Innovate/Protect owns all the assets of the old Lycos- one of the early stage search engines.

To me, it was rather amazing the stock traded so well in light of this week’s news. The only positive news related to new director Donald Stout- now Chairman of VRNG’s intellectual property committee.

This past week, Stout has become a true David taking down several Goliaths. NTP inc is a company cofounded by Stout- unrelated to VRNG.

However, this past week NTP was richly rewarded after several years of patent infringement battles appeared to pay off big time.

NTP settled with AT&T, Verizon Wireless, Sprint, and T-Mobile- NTP is still going after smart phone manufacturers Apple, Motorola, Palm, LG Electronics, and Samsung.

While the terms of the settlement were undisclosed, the market loved it in the face of some negative news out of VRNG, and bid the stock up to $4.29 on huge volume (7 million shares Tuesday).

Modern day David took down these Goliaths with their massive legal teams- but the true outcome remains unknown. One might assume Stout has earned a gigantic pay day for his efforts. The market certainly did.

I believe this week’s surge will prove short lived as there have been some major negatives this week as well- all related to the Big “D”- D for DILUTION. At some point in the future the public float of VRNG will inevitably be much larger- meaning the stock will become far more cumbersome in terms of moving up the charts.

The other developments this week include the following:

  • VRNG issued approximately 51 million shares in the form of common stock, convertible preferred, and warrants to acquire Innovate/Protect. Formerly boasting a very manageable 14 million shares I&O, it has now ballooned to about 65 million or more fully diluted.
  • VRNG also filed a “shelf registration” to raise $100 million. This means the company will eventually be able to sell any combination of common, preferred, debt, warrants, rights, purchase contracts, or units to raise a maximum of $100 million in any form it wants at any price it wants. Since whatever form any capital takes will somehow end up as free trading shares as soon as funded at whatever price the company deems, this registration statement represents an ominous technical black cloud which could hang over this stock for sometime to come.

In the September/October time frame, Innovate/Protect’s case will be moving to the next stages. This is when I expect the story to really heat up.

In a best case scenario, I expect the stock could be worth about $10 with this new dilution coming into the picture. I’ve read forecasts of $30 per share, which would imply a $2 billion market cap- that’s without raising the $100 million they filed for this week.

Add in the potential $100 million that will certainly take some form of massive dilution, and the picture becomes even murkier.

I still believe this stock should be owned. The market sometimes has the ability to wear blinders when it comes to explosive upside potential- as we have here.

I’m no lawyer, but I know one who’s following the story. These law suits will not likely be worth $2 billion- probably something more like $500 million at best.

My suggestion- accumulate on dips into the $3.25 to $3.50 range.

At present- I’m not a shareholder, just an interested party. I’ll be looking at some call options if the stock trades off.

A reminder: Catch me live on TV every Monday from 12 to 2PM eastern.

Simply go to www.bigbizshow.com, and click on the “Watch Us Live” button. I’m the guest host on the show every Monday.

Home Page : www.otcjournal.com

Email Questions or Comments To: [email protected]

 

 

The 21st Century’s New Oil

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The 21st Century’s New Oil

In a recently released research report, Goldman Sachs describes water as “The Petroleum For The Next Century”. In 3rd World Countries, millions of people are dying every year from water shortages and contamination.

Goldman’s report goes on to state:

“The demand for water—the life-sustaining natural resource that has no substitute—continues to escalate at an unsustainable rate, fueled by population growth and industrial expansion. The world’s fresh water supply is also shrinking due to pollution, draining of underground aquifers, and climate change. As a result, we expect to see a sustained focus and investment in the global water sector for years to come.”

Just to give you an idea of the magnitude of the problem, here’s a global map depicting the areas of the greatest shortages around the world:

As you can see, much of the modernized world does not suffer from water shortages. However, look at the purple areas of Africa, Central America, South America, and parts of Southeast Asia. There are critical water shortages described as “Economic”- meaning their economies cannot function properly due to lack of water.

So- how pervasive is this problem? Glad you asked.

The World Health Organization estimates a lack of safe drinking water affects 1.1 billion people globally. One of every six people on Earth lacks available safe drinking water.

The Sub-Saharan portion of the African continent has the largest number of nations and the largest populations afflicted with water stress. The lack of safe water affects health, agriculture, women, education, and mostly children. The fight over water is considered by many to be the new catalyst for armed conflict in the 21st Century.

So, how’s the outlook for the future? If the last century gives us any clue as to what we can anticipate going forward in this century, hyper critical water shortages lay in our future.

As you can easily from this UN prepared chart- competition for water vs human consumption grew in the 20th Century far faster than the global population. As the US entered the Industrial Revolution, water was required in disproportionately greater quantities for a myriad of uses.

The 21st Century is expected to be much the same. However, far larger populations- China, India, and Africa- are expected to modernize over the coming years, and related water use is expected to grow exponentially.

In fact, the Pacific Institute forecasts global water demand will grow by 40% in the next 10 years. That’s a mind boggling statistic, and one not to be taken lightly.

If you’re a growth oriented investor, you cannot ignore this largely under followed sector.

The number of young, entrepreneurial companies that grow and prosper as new technologies and techniques are adopted could rival the growth in the oil sector from 1950 to 2000. After all, one doesn’t have to consume oil to survive.

You can even live for about 28 days without food. However, you can only live about 72 hours without any water. H2O is the one resource humans must have on a daily basis to sustain life.

I’m going to be scouring the microcap world for ideas in this sector.

Stand by to make some money if you have the vision and patience. More to come.