When a tragic event — or an act of God, depending how you look at it — happens like the current oil slick in the Gulf of Mexico, 9/11, or the even the horrible tsunami of 1994… there are companies that come out of nowhere and offer solutions.
And because we exist in a capitalist world, money tends to flow where it is most needed. In this case, the companies that are Johnny-on-the-spot with answers get the capital inflows.
That’s how it should be.
Check out OSIS after the Twin Towers fell…
OSI System’s makes the Rapiscan security system which is used to inspect baggage, cargo, vehicles, and other objects for weapons, explosives, drugs and other contraband, as well as to screen people.
Obviously, as the world changed in dramatic fashion, this company was “discovered” and rose to the top as a problem-solver. The stock went up 824% in six months; volume shot off the charts.
OSI was able to leverage its stock price to expand at a rapid clip and keep Americans safe from terrorists.
Sutron (STRN) Jumps 585%
Sutron is a company that makes products from “the collection and monitoring of hydrological, meteorological, and oceanic data for the management of critical water resources and optimization of hydropower plants, as well as for warning of disastrous floods, storms, or tsunamis.”
Everyone remembers the massive tsunami that killed more than 100,000 people in Indonesia…
It turns out that Sutron had some technology that could predict these events and save lives due to an early warning system. Capital flowed to the company and the share price surged because they had a solution to a very real problem.
The Oil Slick
And today, after the BP/Gulf of Mexico oil disaster, companies are receiving an inflow of cash because investors believed they might have the answers and ability to help clean up the black slop that’s destroyed not only wildlife and ecosystems, but economies, marriages, and lives.
Sociologists tell us that following the Exxon Valdez oil spill in Alaska, there was a dramatic increase in divorces, spousal abuse, and suicide. You can’t destroy a man’s livelihood — be it as a hotel manager or shrimp boat captain — and expect him to just bounce back… And the Valdez thing was nothing in comparison to what we’re dealing with now.
There are more than 14 million people who live on the Gulf coast of America (not counting Mexico, Cuba, etc.); there are less than 700,000 who live in Alaska.
I consider myself a well-traveled guy, and I don’t think I know anyone who has ever been to Prince Williams Sound where the Valdez oil spill happened. And yet, the screaming and outrage from that disaster continues to this day.
Even if the “top kill’ plug works and stops the 500,000 gallons of oil that have been flowing into Gulf waters daily for over five weeks, the BP oil spill will be at least twice as large as the Valdez spill.
It’s no wonder the Ragin’ Cajun James Carville is spitting bile and calling out Obama on TV. Carville is a powerbroker for the Democrats, known to make and break people and policies. That said, for him to be calling out the country’s president — a member of his own party — is shocking to me.
But the anger is only going to build… This thing is just getting started.
When Power Gets Pissed
The real power in the country — and indeed the world — is centered in Washington D.C. and New York City.
These people like to spend the weekends on beaches in Delaware and Long Island. Can you imagine what will happen when this oil slick hits the Gulf Stream and turns the corner north?
Forget Key West… think Kiawah Island, Dewey Delaware, the Hamptons, Newport Beach, Nantucket, the Bush and Kennedy compounds… You haven’t even begun to hear the wailing, screaming, and rending of cloth that will happen when oil washes up on these pristine beaches and destroys the fisheries from Hatteras to the Grand Banks…
Let’s hope is stays out of my beloved and already hard-hit Chesapeake Bay.
But I’m not holding my breath… The disaster is spreading. Here’s a graph put out by governmental agency NOAA:
It makes me insanely angry when I think that my children may not be able to fish and crab on a hot summer day. I can’t imagine the rage in Louisiana.
It’s a wonder BP headquarters haven’t been fire bombed yet…
Cleanup Stocks that Clean Up
It should be obvious why companies that might be able to clean up the oil have seen share prices go up.
Check out penny stock Mop Environmental Solutions (MOPN.pk). It jumped from 0.0001 to 0.20.
Imagine if you had $10,000 in that bad boy a few months ago?
Now don’t get me wrong… I’m not recommending MOPN in any way, shape, or form. As far as I can tell, they are a story and a website.
That said, I have found one company that makes those white, absorbent oil booms that are being towed behind boats and sucking up oil. Now this is a quiet company; it pays a 3% dividend and has a P/E of 14 and a market cap of only $135 million. Its float is a tiny 5 million (which means any interest will send it up).
Like I said, this is a quiet company from the Midwest. It doesn’t put out press releases — only earnings.
I was able to find this outfit by tracking down ID codes on these oil booms. These codes were taken from pictures showing the Coast Guard loading supplies.
These booms are in short supply.
Louisiana Governor Bobby Jindal said yesterday, “We need more boom, more skimmers, more jack-up barges.” He is requesting a million more feet — and that’s just for a single state…
When word gets out, the company that makes this is going to launch. It would be good if your capital was at work when it did.
Energy and Capital