Although their revenues, and industry as a whole, are booming, traders frowned heavily on the 10-Q filing of ThermoEnergy Corp. (TMEN) last week. Sending the penny shares to a new 52 week low despite revenue growth of 70% compared to the same period in 2011, TMEN stock is poised for a breakout session in the coming days/weeks. With news today of their first commercial scale hydrofracking water production unit at an oil field in the Southwestern region of the U.S., this will easily balance the scales after losing their contract from the New York City Department of Environmental Protection last week.
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TMEN Stock Chart
Market Cap: 8.43M
Close: 0.07, up 0.0025 (3.70%)
Average Trade Size: 7,621
Issued and Outstanding: 120,454,575
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Hydro-fracking is here to stay, like it or not. Last week, a report came out on how California is sitting on top of a shale formation which makes the one on North Dakota look like a glob of spit. Since the company’s ThermoEnergy FracGen™ removes brine and other impurities from brackish water located deep in local aquifers and produce water suitable to be used in hydraulic fracturing, TMEN just hit a gold mine with this first commercial sale.
The best part is, its not the first time they are going to book some coin after successful pilot testing of their Turbofrac™ system for cost-effective treatment and recycling of produced water from hydrofracked wells. Revenues for the three months ended September 30, 2012 totaled $2.03 million, a 70% increase versus the same period in 2011; $1.19 million. Although revenues in the recent quarter were primarily driven from their recently terminated contract with the New York City Department of Environmental Protection, they had also booked the first sale of a mobile FracGen water production system to the oil and gas industry.
Short sighted sellers dumped out of TMEN stock after hearing about the contract termination, but given ThermoEnergy’s focus on the oil & gas and biogas industries, traders can expect the short-term effect due to the termination of the NYCDEP contract to be offset by the Company’s successful long term strategy. They recently banged in a $1.1 million contract with Indonesia’s largest power plant, Paiton Energy’s new Paiton 3 power station located on Java Island, and another $900,000 deal with Unity Power Alliance (UPA) to build a bench-scale “flameless” combustion system for clean coal power generation.
About TMEN Stock
ThermoEnergy Corp. is a diversified technologies company engaged in the worldwide development, sale and commercialization of patented and/or proprietary technologies for the recovery and recycling of wastewater, chemicals, metals, and nutrients from waste streams at oil & gas, biogas, powerplant, industrial, and municipal operations. In addition, the company holds patents on pressurized oxy-combustion technology for clean, coal-fired power generation.
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Bottom Line: TMEN is a great penny stock to play from its recent bounce of the 52 week low. Level 2 is so thin on TMEN stock that a bounce to the 20’s may not be out of the question if a momentum session was to happen. As for a Company, the numbers don’t lie — Their revenue growth is “fracking” awesome!
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