Charles Mizrahi is the founder of Alpha Investor and occasionally he comes across a small company we ought to know about, like this $5 Microcap Oil and Gas Company.
We should know about it because, over the past few months, this company has started generating up to five times more revenue for its product, than competitors can get for theirs.
The best part is the stock trades for under $5 and thanks to “an obscure 20-year-old regulation”, we can buy shares before large institutional investors scoop them up.
We're no strangers to Charles Mizrahi's pitches here at Green Bull. We have stayed on top of his stock picks and most recently also revealed his #1 Oil Stock for 2023. With nearly 40 years of Wall Street experience as a trader, money manager, and hedge fund manager, Charles is no Johnny-come-lately to investing and thus his insight deserves more shrift than others we review.
One of the first things that are relevant to this story is how the right decision from a CEO, at the right time, can potentially turn an unknown company into a multibillion-dollar giant, and make investors a lot of money along the way too.
It has happened plenty of times before, just consider Bill Gates back in the late 1970s signing a monumental deal with IBM to have Microsoft provide the operating system for Big Blue’s new personal computers…an operating system Microsoft didn't have, but that's a whole other story.
The decision that followed to retain full ownership of the operating system and license it out to other computer makers as well, created one of the most powerful companies ever.
Something similar happened in 2007 when Netflix CEO Reed Hastings made a decision that changed everything.
After mailing out over 1 billion movies via snail mail – a money-losing endeavor, Hastings decided to move away from physical DVDs and instead, started shifting Netflix’s business model towards online streaming. This eventually sent Netflix shares to the moon and as of the end of last year, early investors were up over 100X their money since Hastings made that one decision.
The Next Great Business Success Story?
Warren Buffett once said, “The key to investing is determining the competitive advantage of any given company.”
Charles believes one small company in the energy sector has an advantage its competitors can’t touch and it's not some pie-in-the-sky renewable or alternative energy source.
This company is in oil and gas and the CEO has made one decision that will prove to be a game-changer for this company.
Everything Charles knows about this $5 stock, he's put in a special report called The $5 Powerhouse – The Next Great Microcap Winner.
It's ours for free if we join Charles Mizrahi's premium research service, Microcap Fortunes. The cost? $1,995 for the first year with a 100% satisfaction guarantee over the next 12 months. For this price, we'll receive timely trade alerts on microcaps Charles is watching, a model portfolio, weekly updates, and access to a private members-only website.
Oil isn't Dead
Just three years ago crude oil prices briefly traded below $0.
Three years later, oil is up over 400%, and it's looking highly likely that the price is headed much higher.
Economics 101 says when demand rises faster than supply, prices go up and that is precisely what is happening now.
Global oil demand is set to rise by 1.9 million barrels per day (mb/d) in 2023, to a record 101.7 mb/d. But supply is not keeping up.
The Energy Information Agency (EIA) says oil production in 2023 will average only about 100 million barrels per day. This imbalance is expected to become more pronounced in the latter half of the year, which is when prices could really take off.
That's where Charles' oil and gas microcap comes in, as it's unlike most other energy companies that are at the mercy of the market.
This is because the CEO’s game-changing decision lets it generate up to five times more revenue from its energy. How is such a thing even possible?
A Small 4 Megawatt Electrical Power Plant
In 2020, the company's founder and CEO brought online a small 4-megawatt electrical power plant.
Instead of selling natural gas on the open market, this company uses its natural gas to generate electricity in its power plant and then sells that electricity to the power grid.
The price of natural gas as I write this is about $2.26.
So by generating electricity with its gas and selling it to the grid, this company can generate the equivalent of more than $11 for its gas.
This is how the company generates up to five times more money for the same natural gas, and because it is a microcap covered by only two analysts, it is flying completely under Wall Street's radar. Let's find out its name.
Revealing Charles Mizrahi's $5 Microcap Oil and Gas Company
Here is everything we know about this company so far:
- It has grown its proven and probable reserves to record levels, increasing its oil and gas reserves by a whopping 65% in just the last year.
- The CEO has gone all in on this company, investing $22 million of his own money to start the business – nearly everything he had.
- The company is expected to expand its capacity to generate electricity it sells to the grid by 500% this year.
- Its current share price is hovering around $5.
Some very well-disguised clues made it tough to pinpoint any specific stock. The closest I was able to find is Epsilon Energy Ltd. (Nasdaq: EPSN).
- The company's total probable reserves hit a new record as of the end of the 2022 fiscal year.
- Record revenues, EBITDA, and free cash flow have allowed Epsilon to simultaneously build its capacity, liquidity, and return capital to shareholders.
- Epsilon's share price is right at the $5 mark, with a small $115 million market cap.
Make 5x Your Money over the Next 5 Years?
Charles is right when he says many of today’s biggest companies, some with market caps close to $1 trillion or more like Berkshire Hathaway and Amazon, started out as microcaps. It is by far the corner of the market with the most opportunity for small individual investors like you and me.
If you can't already tell, I personally love a small, off-the-beaten-path business that is quietly generating above-average returns more than the next guy. But a microcap in the resource sector is just about the riskiest kind there is and in the same class as biotech stocks, yikes!
To me, this commodity-based microcap's competitive advantage isn't all that scalable and definitely not enough to 5x its stock over the next five years unless the price of oil explodes…which may end up happening.
Quick Recap & Conclusion
- Charles Mizrahi is teasing a $5 Microcap Oil and Gas Company that can generate up to five times more revenue for its product, than competitors can get for theirs.
- We learned that the company's founder and CEO brought online a small 4-megawatt electrical power plant in 2020, which enabled the company to use its natural gas to generate electricity in its power plant and then sell that electricity to the power grid for the equivalent of more than $11/MMBtu.
- The name and ticker symbol of this $5 stock is revealed in a special report called The $5 Powerhouse – The Next Great Microcap Winner. It's ours for free if we join Charles' premium research service, Microcap Fortunes at a cost of $1,995 for the first year.
- None of Charles's clues were producing any tangible leads. The closest thing I could find is Epsilon Energy Ltd. (Nasdaq: EPSN), but it may be another microcap that he is teasing here.
- Unless you have some special insight into a particular business or industry, microcaps are best purchased in baskets rather than as standalone stocks to minimize risk and maximize upside.
What $5 microcap do you believe Charles Mizrahi is teasing here? Let us know your picks in the comment section below.