Strategic Environmental & Energy Res Inc (OTCMKTS:SENR) Making Smart Moves

Strategic Environmental & Energy Res Inc (OTCMKTS:SENR) recently put out its first quarter results, changed the chairman of the Board, and signed a deal entering the Canadian Oil & Gas sector. Due to these events, the company's share price went from the level of $0.7 per share to almost $1.10 per share on large volume. The editorial team saw the movement and decided to commence an investigation to understand deeply the reasons for the jump. This article is the result of our research. Have a look at the jump. Later on we will explain to you what happened:SourceBusinessThe company is quite old and has acquired, merged, and changed names several times. Novice investors need to see this as a good factor. Old corporations with a lot of transactions have the best employees, and are normally directed by mature and experienced Board of Directors. The business entity was initially founded on February 13, 2002. It changed its name to Strategic Environmental & Energy Resources, Inc. in January 2008 and also acquired two businesses, namely REGS, LLC, and Tactical Cleaning Company, LLC. We could find the business objective in the latest annual report:

"Assembling complementary service and environmental, clean-technology businesses that provide safe, innovative, cost effective, and profitable solutions in the oil & gas, environmental, waste management and renewable energy industries" Source

The company operates six subsidiaries to do that:- REGS, LLC: provides industrial services to both upstream and downstream services.- Tactical Cleaning Company, LLC (operating since 2005): provides cleaning services to the tanker rail car industry.- MV, LLC (operating since 2003): is responsible for patents of dry scrubber solutions for management of Hydrogen Sulfide in biogas, landfill gas, and petroleum processing operations.- Paragon Waste Solutions, LLC (formed late 2010): is responsible for waste destruction using a patented technology owned by the company.- ReaCH4BioGas (formed February 2013): provides renewable natural gas projects.- SEER Environmental Materials, LLC (formed September 2015): produces chemical components to enhance the capability of biogas.- JVs: the company owns interest in several joint ventures.This is, therefore, a holding company operating in very different segments. Savvy traders would call it a "conglomerate". The company noted it in the annual report in the following way (% of Annual Revenues):

• Industrial Cleaning: 31%
• Rail Car Cleaning: 27%
• Environmental Solution: 40%
• Solid Waste: 2%

Recent developmentsTraders reacted positively to the following news. On May 4, 2017, SENR put out that the company had partnered with Innovative Energy Technologies, which is a Canadian company, to market the technology owned by MV, LLC: "Variable Volume Vapor Recovery Unit (V3RU™), and V3RU Plus™ technologies". The two companies will be creating a joint venture, wherein SENR will own 90% working interest. In our opinion, traders did not react properly to the new venture, since the press release, which we recommend to read, was too technical and did not contain sufficient information to price the JV. However, we believe that entering the Canadian market will bring more revenues to the company, thus it should be seen as a positive step.On May 8, 2017, the company appointed Donald F. Moorehead as chairman of the board of SENR. He has some expertise in mergers and acquisitions, so he may be willing to sell one of the subsidiaries or merge the company into a bigger group:

"Mr. Moorehead bought Pittsburgh-based Chambers Development Company in a $725-million transaction that, at the time, created the fourth-largest solid waste company in North America. Just four years later, USA Waste, upon acquiring Waste Management in a $13 billion-dollar merger became the largest solid waste company in the world. Mr. Moorehead was Chairman of the Board and Chief Executive Officer of USA Waste from October 1990 until May 1994. From 1994 through August 1997, he was vice chairman and chief development officer." Source

In our opinion, the most interesting news came with the Q1 2017 financial figures. We highlight the following from them:

• $4.2 million in total revenue, 20% increase as compared to Q1 2016
• Gross profit: 27.9%
• For Q1 2017, adjusted EBITDA was $0.3 million compared to $0.4 million in Q1 2016

In addition, in the press release, the M&A expertise of the new Chairman of the Board was mentioned. We believe that the words are relevant:

"Mr. Moorehead a unique portfolio of assets that will enable him to leverage his 30 years of successful acquisitions and mergers as well as decades of stellar operations across all aspects of waste markets worldwide. The company's initial focus will be to provide Mr. Moorehead with several patented technologies to change the way medical waste is handled in the U.S. and abroad (Paragon) as well as capture market share in the LFG space (MV)." Source

ConclusionSENR released interesting news in May, and traders celebrated by pushing up the share price. In our opinion, the release of the Q1 2017 financial figures, which included an increase in the amount of revenues, and the election of a new Chairman with M&A expertise, were enough to justify the jump. Additionally, in the due research, we saw that the company is a conglomerate. The company is ripe for a restructuring to unlock shareholder value. To sum up, there is a lot to like in this company. We will be updating our subscribers as soon as we know more. For the latest updates on SENR, sign up below!Disclosure: We have no position in SENR and have not been compensated for this article.