8-k Filing Drives Andatee Stock Higher

Posted by on Aug 05, 2010 | No comment

Andatee China Marine Fuel Services Corp. (NASDAQ: AMCF) stock soared yesterday to break all of its July resistance levels. On nearly twice the average volume traded, the under $5 dollar stock jumped straight up in the middle of the trading session and stayed at the higher levels until the market closed.

The total increase recorded over the day was 8.13% and the stock closed at $4.39, a value above some previous resistances. Though, the market was not consolidated and the volume is not impressive, thus despite the bullish MACD and the climbing RSI, it seems too early to see yesterday’s movement as a strong recovery signal for the stock.

Andatee operates mainly in China and is engaged in the production, storage and distribution of blended marine fuel oil for cargo and fishing vessels. The stock has traded around the $7 dollar value in March this year, though it is severely losing value since then and seems to be strongly undervalued according to its sales and according to the book value of the company.

Moreover, the share price looked in the last weeks resistant to the corporate updates of the company.

End of last month 5 million new shares were registered with the SEC, which can be issued under the company’s equity incentive plan and for which the maximum offering price is set at $3.98 for shares. The market’s reaction to that registration statement was, however, almost undetectable, although the dilution risks look enormous. Probably investors are convinced that the stock is already undervalued enough to lose more of its value.

A couple of days before the registration, the company made acquisition news with an 8-k filing for an Equity Purchase Agreement with another China-based company, engaged in retail and wholesale of fuel oils and petrochemical products. According to the agreement, Andatee will acquire 52% of that entity’s equity in exchange for cash.

The investment will improve the balance sheet, where another positive thing is that Andatee had no long-term debt at the end of March. Though, the declining revenues and net income over the last three quarters look like a real problem, as seen in the current market valuation as well.

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About BeaconEquity.com

BeaconEquity.com is committed to producing the highest-quality insight and analysis of small-cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily OTC stocks in the stock market today, which have traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

Beacon Equity Group Disclaimer

This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Beaconequity.com is a wholly-owned subsidiary of BlueWave Advisors.

While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

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