Good Tuesday morning, one and all. Yep, it's another morning edition of the newsletter. We could have sent this edition yesterday since that's when the news came out. We didn't want to overload your inbox though, right after putting Pivot Pharmaceuticals (PVOTF)in the spotlight.
Thing is, this news is too big not to make sure you saw it. So, here it is, still plenty fresh.
Remember New Global Energy (NGEY)? We first unveiled this trading idea back on November 10th, pointing out how it had partnered up with a company called International Sustainability Group to develop and begin marketing a moringa-based protein bar. That partnership and product were just microcosms of what was to come with the budding moringa market, and NGEY was - and still is - in a prime position to capture a big piece of it.
As a refresher, moringa has been hailed as the world's next great superfood. The moringa tree's leaves are chock-full of nutrition like protein, calcium, beta carotene, potassium, and more. It's got 17 times the calcium of milk, 9 times the protein of yogurt, 25 times more iron than spinach, and more. Moringa leaves are also rich in antioxidants like beta-carotene and chlorogenic acid. It's even been known to lower blood sugar levels. Perhaps that's why it's been used medicinally and as a food source for several centuries now.
North America's love affair with moringa, however, is just now starting, and the industry simply wasn't ready to meet demand. That's why New Global Energy is in the right place at the right time. It's one of the few - and maybe the only (we found no others) - raw moringa suppliers in the U.S.
It's a little tough to pin the specifics down, as we don't know exactly how much moringa can be produced on a per-acre basis. We've pieced together some different pieces of data here and there, however, and come up with what is a meaningful idea of what kind of revenue we could be talking about with this company.
Here's what we know: NGE has already planted 6,000 Moringa trees on its farm in Thermal, California and another 10,000 trees on the Mecca farm. The company has also planted 20 acres of Moringa trees in Costa Rica and is evaluating a nearby 100-acre property to plant more trees. Already projected to yield annual revenues of $3 million, the additional acreage in Costa Rica pumps up the revenue potential to $15 million per year.
Again, it's just a guess, but a reasonably educated one - those are the company's numbers.
Fast forward to this week. On Monday, New Global Energy announced it was pairing up with the world's largest moringa farm - in Leon, Nicaragua - to bring a whole new brand of moringa products to the market. The brand name will be Moringa Reserve, LLC, and it's being established specifically by NGEY for the purpose of turning the farm's massive 180-acre moringa supply into moringa-based products for U.S. consumers.
It's not completely new territory for NGEY. As was noted above, back in November we learned New Global was teaming up with the aforementioned International Sustainability Group to create a power bar called MoringaUP; ISG already makes a nutrition bar called AlgaeUP (yes, it's in demand). But, given that moringa-mania is taking over and there's nothing else out there on the market like it, MoringaUP could be a big win for New Global Energy. Power bars and nutrition bars are an $8 billion market, after all.
New Global also announced in early January it was going to start the production of moringa capsules, underscoring the diversity of how moringa can be used.
In retrospect, we all should have recognized the capsules and the MoringaUP bars as a big clue that New Global Energy wasn't just thinking about being a supplier of the plant, but rather, also thinking about getting in on the retail side of the business. Being both gives it greater pricing and supply flexibility...and there's still nobody on the U.S. landscape in the great position New Global is in.
At stake is a piece of the $4 billion moringa market, and what is expected to be a $7 billion moringa market by 2020. A small fraction of that could be a windfall for New Global Energy, but I've got a feeling NGEY is going to score a large fraction of that market as it makes a name for itself in the convergence of the nutrition bar market and the moringa market.
With all of that being said, the really noteworthy story isn't the company's story, but the chart of NGEY itself. It's been brewing up a breakout effort for a while, and it looks like yesterday's and today's news could finally unleash it.
The chart of NGEY below tells the tale. Shares have been modestly rising since mid-December, though they've been range-bound for much of that time too. This slightly bullish consolidation phase has given the bulls time and room to come together and form an organized effort. All they needed was a reason to start the advance. Look what happened in response to yesterday news - all those buyers charged ahead in unison. They tipped their hand, so to speak, en masse.
Obviously the $0.60 level is a big one. Although NGEY moved above that level for a while yesterday, the close at $0.60 was pretty much in line with the early February peak; there's something about that level. If New Global Energy can just get above that line one more time though, it may well get the rally effort over the hump once and for all.
Nobody knows when or even if it'll happen, but we've got a sneaking suspicion it will, and once it does, it could light some real fireworks. That's why we wanted to get today's edition in front of you as soon as possible.
Bottom line? This is what penny stocks are all about.. finding an underestimated and under-noticed stock of a company with a great story most traders are overlooking. The market's finally starting to take notice of what's going on here, and look how well the stock's responding! We suspect we'll see more of this kind of buying interest materialize in the foreseeable future - including later today - now that the story's getting traction. You may not get another chance to get in at $0.60 per share.
Now, about Oakridge Global Energy Solutions....
We were pretty confident this company was on the right track when we first unveiled it on February 22nd. We were even more sure of a bright future when the company announced on February 24th it had built a battery big enough to power an electric-motorized tractor trailer for 400 miles worth of travel.
Well, today's news pretty much seals the deal to the extent it needed to be sealed. OGES was recently in attendance at the Orlando PGA Merchandise Show -- one of the golf industry's biggest events -- and it sold $250,000 worth of batteries, and got commitments for the sale of more than $20 million worth of lithium-ion batteries.
To golfers? Yep, to golfers.
You may or may not recall, but one of the key product categories Oakridge has taken aim at is the golf cart market. Those carts are battery powered, and for those of you who golf, you'll know many of those carts struggle to make it a full 18 holes... especially an older battery. In that lithium-ion batteries hold more power and can be cycled/recharged far more often than conventional batteries can, golfers and golf courses love making such an investment.
The $250,000 worth of orders is impressive, but the $20 million worth of committed orders is a show-stopper.
And remember, golf cart batteries are just one sliver of the market. The U.S. battery market alone is worth $12 billion, and the lithium-based batteries make by Oakridge Global Energy Solutions are simply better than nickel-based or alkaline batteries. The market is still not giving OGES its due. That is changing, however.
Much like NGEY, OGES shares have been range-bound for a while, but appear to be brewing up bullishness while within that range. They're currently testing the upper limits of that range too. Take a look.
A move above $0.84 could squeeze OGES out of a converging wedge pattern. That's when the party looks like it could really start. In light of the news the company's given is lately, it wouldn't be surprising if that day comes soon.... perhaps even today.
Man, it's a good day to be a fan of penny stocks.