Is Auscrete Corp (OTCMKTS:ASCK) Undervalued Amidst Improving Fundamentals?

In our previous analysis, we made the case of how Auscrete Corp (OTCMKTS:ASCK) faces an uphill task to bounce back, after one of the worst runs in recent years. While there is still a lot that needs to be done, the company has made impressive strides in recent months, which affirm our strongest beliefs that the stock is still a turnaround play.Trading volumes in the stock have skyrocketed to highs of 50 million an indication of growing investors’ confidence in the company’s long-term prospects. While the stock is still languishing near all-time lows, we remain upbeat about it, given the ever-improving fundamentals. ASCK Daily ChartThe stock needs to close above the $0.01 mark, given the increased trading volume, to affirm our thesis of why it is still a long-term play.Before we look at the catalysts likely to push the stock higher, let us first understand what Auscrete Corporation does, in pursuit of growth and shareholder value.Auscrete Corporation Business DescriptionIncorporated in 2009, Auscrete Corporation is a building material, and manufacturing company focused on ‘GREEN’ energy efficient housing and commercial structures. The company operates as a supplier in the housing market. It also utilizes its lightweight concrete technologies for the construction of residential and commercial structures.Structures built by the company’s Auscrete aerate concrete have low maintenance and are highly resistant to molds and insects. The structures also come with considerable mass which makes them highly resistant to hurricane and earth tremors.Recent Developments Renewed investor interest in Auscrete Corporation, in recent days, has to do with the announcement that the company is on course to construct a new production facility. The company has already paid for a 5-acre industrial site in Goldendale WA where it has an additional 5 acres under optionGroundbreaking should happen soon, as the company is in the final design stages for the proposed factory campus. The production facility should be complete in the next four months after which specialized equipment for manufacturing will be installed.

“We re-organized our finances back in December to put us in a much better position going forward. We now have funding to not only complete this plant here in Washington but to commence advance preparations for another plant in the Southwest to supply that market and assist with supply to California, which will also be supplied by this WA plant,” said CEO, John Sprovieri.

According to the Chief Executive Officer, the company has been approached, around the country, to construct a number of affordable and thermally efficient houses. Having got its house in order, the company is set to start accepting orders from contractors and developers soon.Auscrete Corporation plans to construct about 35 homes by the end of the year expected to lead to revenues of about $5 million.What nextMr. Sprovieri expects Auscrete Corporation to grow exponentially in 2018 given the market opportunities that continue to pop up in the industry. The company is especially optimistic about the affordable housing market which is one of the largest in the world and consistently growing. An increase in natural disasters in the recent past has led to a growth in the need for more housing, especially in hurricanes and tornados prone areas.Auscrete Corporation Is Undervalued The Chief Executive Officer believes the stock is highly undervalued given the improved fundamentals and the fact that the company does not have any debt. The company turned down a $2 million credit line with Kodiak last year, highlighting its financial strength.

“Once our production begins in the next 2 or 3 months, the market will begin to reflect a more intrinsic value of an OTC Company with assets which are producing revenues, especially with ASCK having little monthly monetary debts. This all should coincide with all the note conversions finished and behind us,” said Company Business Development and IR Director, Lee Odom

Bottom LineAuscrete Corporation appears to be in a strong financial position, capable of financing development projects throughout the year after turning down a $2 million line of credit form Kodiak. The fact that the company has little monthly monetary debt makes it an exciting pick at the current valuation, as it moves to flex its muscles in the fast-growing affordable housing markets.An increase in trading volumes in recent weeks is an indication that the stock remains well positioned to tick higher in the coming months. That said, the stock remains an exciting pick for investors looking to diversify their portfolio in the booming U.S housing industry.However, Auscrete Corporation remains a long-term play given that it still needs to bring online its production facility to be able to generate significant revenues enough for generating positive cash flow.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.