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A Lot Needs To Be Done In Auscrete Corp (OTCMKTS:ASCK)

A Lot Needs To Be Done In Auscrete Corp (OTCMKTS:ASCK)
Written by
Jim Bloom
Published on
November 15, 2017
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Auscrete Corp (OTCMKTS:ASCK) has seen its worst trading days in their trading history in 2017.The company whose share price has plummeted from highs of $0.9 back in January 2017 fell has seen its price fall to $0.0049 as per yesterday’s closing price.That, however, is not the shocking part.What’s even more worrying is that their trading volumes have skyrocketed to the millions, with the shares transacted in November rising to exorbitant amounts and nearly crossing the 15 million share level.This is during a time when the share prices have remained as low as were before, with the price change being quite minute and quickly followed by a reversal that led them back to their initial price.This price trend can be seen in the chart below:All the above go to show that the company may have some intrinsic problems inherent either to their operations or fundamentals, that the market seems to be punishing through a fall in their prices.This got us interested in the stock thus we opted to relook into their operations and how they have been performing financially over the recent past (our last piece on the company can be accessed here). Based on this, we will give our conclusion on whether the company is a good investment stock or otherwise.However, let us first introduce you to Auscrete Corp.Auscrete Corp: Building AmericaThe company was incorporated in 2009 and is based in Rufus, Oregon. Upon incorporation, their CEO John Spovieri came in with a lot of promise that the company would be a major player in the ‘GREEN’ construction and housing sector.The sector which is currently valued at $8.9 billion and growing at nearly 9% presented significant promise for the company which, as earlier stated, ventured into the industry with a bang.It began trading in the OTC markets towards the end of 2015 with hype rocking its entry into the markets. This was, however, short-lived as any investors who jumped on this felt the negative impact of a downward trend in the share price.The market, still hopeful, continued to invest in the company with the hope of a comeback for the relatively new stock still looming.This was not to be the case.ASCK: Then and NowAs earlier stated, the company has ventured into the green construction sector through their product: Auscrete Cellular Concrete which in 2007 necessitated a project known as Rufus.According to the company, they possess certain proprietary technology in cellular lightweight concrete manufacturing (Auscrete Cellular Concrete) that has been assigned to the corporation. This product was meant to serve as a key block from which the entity would make revenues and profits going forward from then.Since then, little has been done to keep the market in the know of its developments. In fact, we would go as far as saying that they have kept the market at bay on the same.After research into the company and their operations, our main findings were that they have availed quite little, nearly insignificant, information to the market on the progress of their projects.Their current works have not been availed to the market and growth for them seems far from being a reality.Despite this, their CEO in a recent interview went bullish on the stock detailing that they were well in course to making significant revenues and earnings over the next period.Mr. Sprovieri was quoted stating:

“ASCK is on the cusp of significant revenues within this fourth quarter, and $15 million for next year. Our bottom line earnings will be in the order of $3.7 million for 2018.”

Source:This, in our view, is far-fetched courtesy of their current position. With trends in the green construction market standing as are and given that the company has made minimal attempts in their marketing as compared to their competitors, reaching such figures will be a tall order for ASCK.Moreover, going by their financial position, little is to be expected in the coming quarters.FinancialsThe company has continuously made losses over the recent past with their loss position as at quarter two rising to $270,708, up from $168,915, a figure mainly driven by the increase in their interest expense which almost tripled to close at $213,499.Moreover, despite their operating cash flows being better than in their last quarter, they continued to generate negative operating cash flows ($23,514) and their shareholder equity fell to a negative position of $423,688, down from a positive figure of $27,596.All these go to show the work that needs to be put in for ASCK to grow in the short term. As earlier stated, they will need to do a lot to meet the projections set by their CEO.We are therefore quite bearish about ASCK in the short term. We expect them to make only a small amount of what they have forecast as possible. However, in the long term, things may change for them but until then, our opinion holds.ConclusionASCK has a long way to go before making significant moves within their operating environment and their financials. We, however, remain hopeful that they will have a turnaround in the long run despite the grim picture painted about their short term operations and financials.We will be updating our subscribers as soon as we know more. For the latest updates on ASCK, sign up below!Disclosure: We have no position in ASCK and have not been compensated for this article.

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