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Speculative play
Old 07-17-2009, 08:25 AM   #1
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Speculative play

I felt like I needed to try some penny stock action with some money I can afford to lose. So far this play has tripled in value for me and looks like a keeper. I'm not a tout and you can trash me if you want. I have gotten some good tips off this board and it seemed like payback time. Do your own due diligence.

SYNM currently resting around $2 after a runup from 50 cents. They resemble a start-up play but they are already profitable. They have had 6 consecutive quarters with an average 125% earnings surprise.

Conservative management with $18MM cash on hand, no debt, and only 22 employees, most of whom are engineers. Their process converts natural gas or coal into synththetic liquid hydrocarbons which is used for clean burning diesel and jet fuel. The AF has approved the fuel for use in it's jets. They have a patent on the process and they license it out which makes them very profitable. They have further developed their process to convert animal fats and vegetable oil feedstocks into these high octane fuels. That is why they resemble a start-up in that they are building a huge factory in a joint venture with Tyson Foods to convert chicken fat to diesel/jet fuel.

Sounds funny, yes, but isn't this the kind of technology that our gov't should be helping promote? I believe it is and hope to enjoy the ride. I'm also not naive about stock dilutions etc. If the Senate gets to passing the energy act, which they will have to in some form, this stock could run. When the house passed their version the stock doubled in a day.




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Old 07-17-2009, 02:47 PM   #2
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Hey...thanks for the tip. Nothing like a little stock hormone therapy I always say!
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Old 07-22-2009, 10:08 AM   #3
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The company has a new website for their joint venture with Tyson. This is a preliminary site as this factory will not be completed until early next year. It was an interesting read at least: Dynamic Fuels, LLC The shorts are having a run on this stock as it has been moving sideways after the big run-up. They are looking for profit-takers but not finding many. If they can get this stock back down to $1.90 I will buy some more. Rumor has it that there will be some exciting announcements at the earnings conference call on August 5th. Again, I'm not a tout, just having fun with this little guy. My average cost is at 80 cents and it was pretty easy to get enough to feel like a big shot. I would guess some mega-corp will snap them up on the cheap to get the patents. Researching this has helped me to think that someday we will achieve energy independence.
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Old 07-22-2009, 11:45 AM   #4
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I would guess some mega-corp will snap them up on the cheap to get the patents. Researching this has helped me to think that someday we will achieve energy independence.
Converting waste into fuel may well be profitable and have the added benefit of utilizing the waste. But I seriously doubt that this can make a dent in our energy consumption.

Another company has been working on this, and IIRC, there just isn't a big enough waste stream or other feedstocks to have much impact. It might still be a very good thing to do, but let's not get carried away with the scale of what it can do.

Hmmm, here's how that investment is going...

Thermal depolymerization - Wikipedia, the free encyclopedia
Quote:
However, as of August 2008, the only operational plant listed at the company's website is the initial one in Carthage, Missouri.[24]

Changing World Technology applied for an IPO on 12 Aug 2008, hoping to raise $100 million. [25]

The unusual Dutch Auction type IPO failed possibly because CWT has lost nearly $20 million with very little revenue.[26] [27]

CWT, the parent company of Renewable Energy Solutions, filed for Chapter 11 bankruptcy. No details on plans for the Carthage plant have been released.[28]
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Old 07-22-2009, 12:27 PM   #5
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Agreed. Yes, it is naive to think that chicken fat can drive our vehicles on a mass scale. However, for me the main thrust here really is to convert natural gas into clean burning diesel. Natural Gas is in surplus in this country and should be the focus of our energy policy, other than to enhance the electrical grid. To quote Market Grader "SYNM owns the Syntroleum Process for Fischer-Tropsch (FT) conversion of synthesis gas derived from biomass, coal, natural gas, and other carbon-based feedstocks into liquid hydrocarbons; the Synfining Process for upgrading FT liquid hydrocarbons into middle distillate products, such as synthetic diesel and jet fuels; and the Bio-Synfining technology for converting animal fat and vegetable oil feedstocks into middle distillate products, such as renewable diesel and jet fuel."

As an investor, I see an already profitable enterprise with money in the bank, no debt, technology that makes sense for the future, and yet it looks and acts like a penny stock. I am skeptical of electric vehicles saving us for at least 20-30 years from now, probably much longer.

I am anxious for the conference call on the fifth. Their technology is so strong that Tyson is spending all the money needed to build the plant in Louisiana. The engineers are along for the free ride and half the action. The Chinese are also paying them royalties to convert coal into diesel. Smarter guys than me.
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Old 07-22-2009, 02:26 PM   #6
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Natural Gas is in surplus in this country and should be the focus of our energy policy...
Hey, I heat my home with Natural Gas, don't go creating more demand for it, that will drive prices up for me!

Use all the chicken entrails you want


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Old 07-22-2009, 03:05 PM   #7
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I hear you. You're probably with NICOR also. Natural gas prices went down in the pipeline but my heating bill remained the same. Probably something about Illinois politics.
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Old 07-27-2009, 04:35 PM   #8
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Up 18.7% today on 5 times normal volume. Somebody on this board has some deep pockets. Wow!
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Old 07-28-2009, 01:06 AM   #9
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To quote Market Grader "SYNM owns the Syntroleum Process for Fischer-Tropsch (FT) conversion of synthesis gas derived from biomass, coal, natural gas, and other carbon-based feedstocks into liquid hydrocarbons; the Synfining Process for upgrading FT liquid hydrocarbons into middle distillate products, such as synthetic diesel and jet fuels; and the Bio-Synfining technology for converting animal fat and vegetable oil feedstocks into middle distillate products, such as renewable diesel and jet fuel." .
The Fischer-Tropsch process for making liquid fuels from syn-gas was invented in Germany in the '30s, used by the Nazis in WWII and by the S. Africans (SASOIL) during the apartheid era to make gasoline, and researched extensively in the 70s when oil prices were high.

There are currently a lot of "energy companies" that are just recycling technologies from the 70s. What is new or unique about what they are doing? Is the IP protected? What competitive advantage do they have?
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Old 07-28-2009, 08:33 AM   #10
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Yes, the process was invented in the 30's and it still works. It is owned by this small company and licensed around the world. I'm not sure they need to be new or unique like companies in the dot com days. For me they need to make money is all. We seem to have an insatiable appetite for fuels from any source, at any profit margin.
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