IEAM

[la-onda]

 

looks good so far

[fous]

Bought IEAM after La-Onda brought it to my attention. Looks good so far, Thanks bud:)

About IEAM

Industrial Enterprises of America, Inc., headquartered in New York, NY, is an automotive aftermarket supplier that specializes in the sale of anti-freeze, auto fluids, and other automotive additives and chemicals. The company has distinct proprietary brands that collectively serve the retail, professional, and discount automotive aftermarket channels.

Applauds to La - Onda for bringing this to my attention

This stock was brought up to us by ket earlier  when he made a good trade on a rebound, since then the stock has been in a steady ascending channel and now price is on the lower support line looking like its about to repeat history and head towards the top resistance again.

Whats very interesting is all of the insider buying. They're has been a vast amount of insider/institutional buying since the falling knife in december. Which definitely indicates that investors and insiders saw this as a huge buying opportunity.

Insiders and Pike Capital have purchased 1.87 million shares since december which is valued at $11.44m in conjunction with todays closing share price. On top of that IEAM announced at $10m share buy-back program in December as well, As of Feb 16th IEAM had rebought 950k shares and say the buy-back program runs til sept, so we still got some time for IEAM to drive price in our favor. Even as early as yesterday John Mazzuto bought another 100k shares at 6/share. Seems like they have some big plans for the future.

IEAM scored a record second quarter in revenues with 17m compared to Q1 of 10m and 5.6m same period last year. Partial increase of revenue came from the aquisition of pitt pen which offers motors oils and such and gave 5m addition revenues. costs decreased by 25%. EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter was $2.8 million, or $0.20 per share. Income from operations was $2.3 million in the quarter versus $345,000 in the first quarter.

Though since IEAM exercised over 50% of there convertible notes and warrents there income was hammered with another 4m in non-cash expenses bring there income into the negative territory once again. The good news is that they got rid of half of there warrants this quarter and should process the rest of them soon. And with IEAM continued growth and revenue for q4 expected to double this quaters revs the profits will probably start showing even with the conversions, and even more so once there gone. which makes this stock a diamond in the rough because this convertible debt is hindering IEAM's spotlight to value investors.

Technically as i stated previously the chart is in an ascending channel near the lower boundary and according to history should rally up near the top of the channel near 7.50 which is also where descending resistance is coming in as well for a shorter term profit target. Longer term we could possibly see price's hit near the 8.50's + to new highs.

Buying IEAM in the moring.

-fous

[buddjas1]

Fous, I am glad to see that you bought IEAM for your website. 

IEAM is my favorite stock for '07.

I agree that $6.50 to $7.00 will be some resistance.  Nothing much after that, though. 

IEAM's first day of Nasdaq trading will be a 3 million share 20% day.  Many institutions prefer to buy on margin, which is less available for stocks not on a major exchange.

[la-onda]

FYI:

1)
Industrial Enterprises of America (IEAM)
At the other end of the spectrum in terms of market cap we have Industrial Enterprises of America, a $78 million market cap company that sells chemicals, additives and fluids used in cars and air conditioning systems. This stock has doubled since I wrote about this company in early December (http://investorideas.com/insiderscorner/Articles/120806.asp). I think it will go even higher because the company's chief executive John Mazzuto just purchased another $600,000 worth of the stock at $6. The stock got a bounce Wednesday on news of this purchase, and this name moves around a lot. So it may pay to be patient and buy with limit orders. Industrial Enterprises grows by buying "mediocre" companies and turning them around. It is also opening a plant in China which should bring down costs.

2)
(http://investorideas.com/insiderscorner/Articles/120806.asp) from December 8th 2006:

Look for beaten up names

I'm not selling any of these winners that I own. But for new positions, I'm not chasing strong performers like these either -- even where insiders are buying significant positions. There's too much bullishness in the market right now – suggesting we'll see pullbacks that will allow us to get better entries on the superior performers.
Instead, for new positions I'm sticking with insider-buy stocks that have been beaten up -- preferably savaged -- by the market, but unfairly so. I believe these will have more bounce if the overall rally continues. And they should see less downside in any reversal since they've already been pounded.
This kind of stock is hard to find. But the market handed us a prime example this week in Industrial Enterprises of America (IEAM), a tiny New York-based vendor of chemicals, additives and fluids used in cars and air conditioning systems.

A week to remember

Industrial Enterprises may be in some pretty dull businesses -- but management and investors have had an electrifying week.
A combination of delayed filings, disappointing earnings, surprise expenses and flubbed communications sent the stock tumbling nearly 70% to nearly $3 on huge volume.
But it doesn't seem that anything has really changed in the underlying businesses – except that they continue to get better. Cost cutting and sales growth should lead to a tripling of revenue by the second quarter of next year, over the year before. For act two, a plant in China is expected to help bring down costs in 2008.

A matter of trust

Management credibility is another matter. It took a severe hit along with the stock this week as investors griped openly in conference calls of a need to revamp communications with Wall Street. Chief executive John Mazzuto – in conference calls and in interviews with me – pulled no punches in offering a mea culpa. "We screwed up, there is no excuse," he says.
One of the biggest surprises for investors was a $1.6 million non-cash charge for expenses associated with warrant financing – an expense that should continue for about another year. Another no-no – delays in filings covering the last quarter – was linked to those financing expenses. Industrial Enterprises auditors held up the filings at the last moment to rework calculations on the warrant expenses, contributing to the delay.
Another problem was that Industrial Enterprises reported operating earnings below what investors expected – in part because the company took longer to do an overhaul of operations last quarter than it expected. All of this means that Mazzuto and Industrial Enterprises have lost a lot of trust with investors – many of whom preferred to exit and move on to companies where managers cook up fewer surprises.

A matter of time

But management credibility has a way of coming back over the course of a several quarters especially when you have two conditions in place.

    * Managers who face the problem head on at the outset and admit fault -- rather than hide out or pass the buck -- and take steps to resolve the problems. Mazzuto is taking over as finance chief and the firm is hiring a new auditor, among other changes.
    * A decent underlying business that is seeing healthy growth.

I believe you have both with Industrial Enterprises, which makes the stock a buy right here. Insiders seem to agree. They've purchased over $730,000 in the carnage this week. That's a lot for a small company like this. There are still disgruntled investors who want out. So the weakness isn't over. But on Thursday, at least, big buyers seemed to step in every time the stock fell to around $3.10. Be patient and purchase shares with limit orders.

What lies ahead

Here's a quick look at what the company does, and why what went wrong this week might not matter in the long run.

Industrial Enterprises has a division called EMC Packaging that repackages hydrofluorocarbon gases for use as a refrigerant, and in aerosol cans that shoot air as a way to clean things – like your computer keyboard. A division called Unifide Industries sells fluids used on cars like deicer, wind shield wiper fluid and tire cleaner. Pitt Penn Oil distributes discount motor oil, transmission oil, brake fluid, antifreeze and other fluids.

Here's what may bring decent gains in a year if you buy the stock now.

    * Chief executive Mazzuto likes to say he is in the business of buying "mediocre companies." Then he puts in new managers to fix them up, selling off non-core assets. Through a combination of things like cost cutting and cross-selling of products, the company expects to see $35 million in revenue in the June-ending quarter of next year.
      If so, that would be huge growth because the company saw less than that in revenue, or $30.7 million, for the entire fiscal year ending in June this year. The company expects to earn 45 cents a share in second quarter of next year, compared to 15 cents a share in the same quarter this year.
    * Industrial Enterprises is opening up a plant in China that should start shipping in March. It could double profit margins in the aerosol business. "It will have an enormous impact in 2008," says Mazzuto. The company is also expanding distribution of aerosol products to get a national reach.
    * Investors panicked in part this week because of apparently low cash levels. But Industrial Enterprises has $2.5 million in cash, and it expects monthly free cash flow of $700,000 to $1 million. Money from warrants – over $10 million – may be used to buy back stock in the coming months.
    * Mazzuto takes no salary. Instead he plans to reap his reward through a big position of around 350,000 shares purchased before the problems this week at an average price of about $5. His children also have large positions. Insiders, mainly Mazzuto, bought another $730,000 worth in the current sell off for prices ranging from $3.40 to $4.60. In short, he has a big incentive to do things that make the stock go higher.
    * By my calculation, Industrial Enterprises looks like its trading for a miniscule .25 or so times expected sales. That's cheap.


3)
updated chart, nothing seriously happened now, bouncing back from EMA 20, EMA 9 now new support 

[la-onda]

EMA50 has crossed EMA 200, low volume day, I will continue to hold 

[buddjas1]

Cannot wait for fiscal year Q3 results.  Nasdaq has to be soon.  Regular MA golden cross probably in April.

[la-onda]

stopped out, will be on my watchlist

[buddjas1]

Looks like I bought your shares and Fous's shares.   I doubled up a couple days ago.

[raspi]

NASDAQ trading approved
http://biz.yahoo.com/bw/070419/20070419005191.html?.v=1

[la-onda]

Awesome NEWS: NASDAQ TRADING NEXT WEEK &

Industrial Enterprises of America Acquires Hi-Tach Oil
Thursday April 19, 8:00 am ET

NEW YORK--(BUSINESS WIRE)--Industrial Enterprises of America, Inc. (OTC BB:IEAM - News), a specialty automotive aftermarket supplier, today announced that the Company has purchased Hi-Tach Oil, Co., Inc. for $350,000 in a combination of cash and promissory notes. Hi-Tach, based in Kannapolis, North Carolina, sells and markets a distinct line of high quality oil additives and lubricants. As part of the purchase agreement, IEAM acquired all inventory, purchase orders, marketing materials, formulae and copyrights from Hi-Tach. Additional terms of the transaction were not disclosed.

Hi-Tach's high quality products may be found in independent auto parts stores, automotive chain stores, fast lubes and other retail outlets from coast to coast.

John Mazzuto, Chief Executive Officer of Industrial Enterprises, commented, "Hi-Tach Oil is a perfect complement to our existing Pitt Penn and Unifide product lines, and the transaction represents the purchase of another virtual marketing company that can leverage our existing operations. We will package the Hi-Tach products utilizing capacity at our Pitt Penn facility, thus increasing utilization rates while expanding our distribution footprint. Hi-Tach's stabilizers and lubricants are known for providing superior performance at reasonable prices, completely in sync with our business model." To learn more Hi-Tach, visit www.hi-tach.com.

[soxguy]

Based on the news,is this a good entry point this morning? And interpreting the news, nasdaq trading being a positive and the acquisition a possible negative? Or should i let the market decide for me? Thoughts?

[la-onda]

I will reenter today 

[buddjas1]

Based on the news,is this a good entry point this morning? And interpreting the news, nasdaq trading being a positive and the acquisition a possible negative? Or should i let the market decide for me? Thoughts?

How is the acquisition negative?  It's only $350,000.  Even with an all share transaction, that's what 70,000 shares.

Nasdaq is huge, huge, huge.  I'm clearing out the account and going all in.

[soxguy]

Obviously you guys are bullish. Could be fun. Thanks.

[soxguy]

The bid is $6.00. Get in at the bell or wait and see?