E CriticalControl Solutions: A C$0.30 Cloud Play Worth More Than A Dollar

TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

- CriticalControl Solutions is the only company out there offering a pure cloud-based software solution for the oil & gas industry (think first-mover advantage here).

- This software company reported $50.9 million in revenue over 2014, is growing, generates cash, yet has a ridiculously low $16 million valuation whereas the industry average is >$100 million.

- Their new growth strategy, which is progressing very well so far, should pave the way for multi-bagger share price appreciation.

- CriticalControl Solutions is a totally unknown stock; this research report is the first ever.

- Recent insider buying and high institutional backing confirm the buying opportunity.

Upfront note: the main listing and highest trading volume is on the Toronto Venture Exchange, ticker = CCZ.TO. Use this ticker also if you look for this stock on say Yahoo Finance. The US ticker is CCZFF, but this is a non-active listing, so focus on the more tradable Canadian listing with an average daily volume of 25k.

I’m always on the look out for small cap stocks with limited downside risk (well financed, large discount to fair valuation, etc) and a clear multi-bagger upside opportunity (new product launches, land grab opportunity, etc). Add some good insider buying in the mix and sooner or later the stock will shoot up big. My trackrecord proves this, as my 2014 stock pick overview points out an average peak +99% per pick in short-timeframes. Some picks became impressive multi-baggers. All picks I have released on Talkmarkets are performing very well.

Today’s article features CriticalControl Solutions (CCZ.TO), an unknown and extremely undervalued software company. This stock is totally off investors radar screens, as I could not find any coverage on the internet. That’s good news, because that has yielded the next opportunity: a deeply undervalued $0.30 stock actually worth $1.00 or more. This article lays out the bull case.

About CriticalControl Solutions

CriticalControl Solutions is a software company offering cloud-based and scalable software applications for oil and gas producers. Software functionalities include production accounting, revenue accounting, gas cost allowance, financial accounting, chart and data auditing, lab, field, fabrication services, etc.

This is quite unique, there is no other company out there with a cloud-based software solutions penetrating the (rather conservative) oil & gas industry that provides all in just 1 package deal. Here’s why oil & gas companies want this product: a one-time investment in a smart software solution significantly reduces costs longer-term. An interesting trend is that the oil crash has strongly motivated the industry to innovate and reduce costs, which should bode very well for CriticalControl Solutions.  

Management has invested a lot in R&D over the past few years, and 2015 is the start of full commercialisation; the company has launched a plethora of new initiatives.

The investment community doesn’t know this company even exists

My strategy is buying stocks that are undervalued and, perhaps more importantly, completely overlooked by the investment community. When I can’t find any research or coverage on sites like Talkmarkets, Seeking Alpha, Stockhouse, Stocktwits, Benzinga, etc, I might be on to something. The best investment moments are before Wall Street finds out about it. CriticalControl Solutions definitely fits the bills.

Insider buying leading the way

 

Management has a lot of skin in the game, and board members are highly experienced in the oil & gas industry (backgrounds at Exxon, etc). Above overview shows the most recent transactions but they have been big buyers in the open market before.

Product overview

CriticalControl Solutions already commercialises a portfolio of products, with great delivery. It’s trailing annual revenue is $50 million, and growing. The bulk of it is recurring. The product list contains 10 services, here are some examples:

ProChart: ProChart uses color recognition to digitally interpret chart data for fluid volume calculations and offers the most extensive reporting capability in the industry.

NetFlow: Monitors and manages remote production and processing sites in real time with the industry’s most effective SCADA dashboard solution.

ProTrend: ProTrend is the industry-leading solution that providers oil & gas producers with an accurate, low-cost, lab-independent composition analysis management solution.

For a full list of their products and services go here.

New strategy

The company has been quite active with releasing updates regarding its new strategy:

  • Earlier this month, they announced they are pursuing a pure energy services focus by divesting their non-energy services (30% of total revenue) and trying to accumulate valuable assets from other companies. This project commenced in Q4 of 2014 and is expected to close in 2 months from now.
  • Soon after the company made public that they succesfully sold off a non-energy related business segment for $1 million.
  • A few days later they announced the successful sale of another non-energy division for $1.7 million.
  • A day later they purchased certain assets from Legacy Measurement Solutions for $2 million which should hasten their entry in the US market.
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Disclosure: The author is long CCZ.TO.

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Comments

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SecretCaps 4 years ago Author's comment

Good news: new insider buying: https://www.canadianinsider.com/node/7?ticker=CCZ

Mark Chue 4 years ago Member's comment

Great article and very compelling....trading very much discounted. Thanks

Simone Radcliffe 4 years ago Member's comment

This stock was not even on my radar, thanks.