A “Commodity” Penny Stock To Buy!

| June 4, 2015 | 0 Comments

PalladiumA “Commodity” Penny Stock To Buy- Patience Required!

We received more exciting news from Clean Diesel Technologies $CDTI this week.  As you may remember, we discussed this company in October 2014 when it announced a US patent for their Spinel technology.

What’s Spinel?

It’s a revolutionary exhaust catalyst coating that promises to drastically reduce, and possibly eliminate, the use of costly platinum group metals (PGMs) in catalytic converters.

Of course, catalytic converters are required on all motor vehicles in nearly every country the world over.  The device sits under you car’s chassis, converting exhaust pollutants into less harmful emissions before entering the environment.

According to a Tuesday press release from $CDTI, their technology is responding very well in testing.  In fact, a Spinel catalyst with 97% less PGMs recorded emission control performance equivalent to the OEM catalyst.

In other words, Spinel is performing just as well as the catalytic converters already approved by government agencies.

That’s big news… 

Clearly, independent testing validates $CDTI’s claims that their technology can provide the global automobile industry huge savings by drastically cutting the use of PGMs in catalytic converters.

Shares of the emission control systems manufacturer soared nearly 70% on Tuesday as investors reacted to the test results.

But wait, there’s more… 

$CDTI announced a partnership with AP Exhaust Technologies on Wednesday.  The collaboration between the two companies should hasten the time it takes $CDTI to get Spinel on the market.

And to be clear, Spinel isn’t the only product offering $CDTI has…

On May 14, the company announced a three-year agreement with a national distributor for the sale of their DuraFit diesel particulate filters.  $CDTI’s diesel filters are aimed at the heavy truck and equipment industry, which the company estimates is a $20 million market.

$CDTI has already landed a big customer with the New York City Department of Sanitation, which recently agreed to use DuraFit in nearly 6,000 of its vehicles.

As you can see, $CDTI has some very promising developments lining up for its future!

But before you buy shares, keep reading…

After announcing all this highly promising news, the company announced a 2.5 million shares secondary offering at $2.05 per share yesterday morning.  Since $CDTI is low on cash and has ongoing negative cash flows, the offering should come as no surprise.

All told, the company should raise around $4.5 million in net proceeds.

Due to the offering, it’s likely that $CDTI’s share price will stay under wraps for a while longer.

I wouldn’t be surprised to see the stock drop to the recent secondary offering price ($2.05), and possibly lower in coming days.

It’s also very important to note that $CDTI has a long history of negative returns.  The company chalked up hefty annual losses in each of the past four years.  As of Q1 2015, $CDTI has an accumulated deficit of $194 million. 

Without question, this is a company that will have to prove itself to investors going forward.

However, the market potential for Spinel is simply too huge to ignore… 

Case in point, General Motors $GM sold 9.9 million vehicles in 2014.  Toyota sold just over 10 million last year.

You get the picture.

Given $CDTI’s promising technology and the cost savings it can provide, just one contract with a top automaker would set this company on a path to tremendous profitability.

That’s why you need to keep a close eye on $CDTI in coming months.  You’ll have a great opportunity to add shares to your portfolio when the price drops to $2.05 or lower.

With a little patience, you may see remarkable long-term gains from $CDTI! 

Until Next Time,

Justin Bennett

BIO:  Justin Bennett is the head commodity research analyst at Commoditytradingresearch.com.  With over a decade of real world trading experience, he finds ways for you to consistently profit from movements in commodities and the companies producing them.  Sign up for our free reports and commodity newsletter at https://commoditytradingresearch.com/free-sign-up.

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Category: Natural Resource Stocks

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.