Greenhunter Energy Inc (NYSEMKT:GRH)

CAPS Rating: 1 out of 5

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Member Avatar kkconway (99.25) Submitted: 6/20/2014 11:35:35 AM : Outperform Start Price: $1.84 GRH Score: -34.69

Something's up with this 80% spike in six weeks on no news of note. Too bad no options are sold, because then then both Bulls and Bears could win using a Reverse Iron Butterfly spread, which only losses money when the underlying stock is rangebound -- well, I am as certain that just as bears and woods having some commonalities that at some imminent point GRH will either revert to 99¢ or shoot up over $3. If you are reading this post on or after July 4th, 2014, how do you like me now? PS, My next post will be on a stock with options.

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Member Avatar jed71 (43.49) Submitted: 6/12/2014 3:53:17 PM : Underperform Start Price: $1.36 GRH Score: +12.95

I am quite surprised by the number of green thumbs on this company, although most of them look old and have maybe been forgotten. There is very little value I could find in the Q’s and K’s for this company, especially for the common shareholders. A little about the firm :

“GreenHunter Resources, Inc., formerly GreenHunter Energy, Inc., is engaged in providing Total Water Management Solutions to oil and gas operators who are active in the Marcellus, Eagle Ford and Bakken shale plays. The Company operates in three segments: Wind Energy, Water Management and Biomass. All of the Company's segments are in development stages with no operations. The Company assembled a suite of water management products and services and markets them under the Total Water Management Solutions brand. The Company's operations includes Total Water Management Solutions, Frac-Cycle, remote access management compliance asset tracking (RAMCAT), equipment and tank rentals, disposal wells, MAG Tank and salt water disposal animation. In May 2014, the Company incorporated environmental solutions division in conjunction with its Total Water Management Solutions.”

The company has been shedding “non-core” assets to preserve cash. It looks like the share price has gotten a bit of a bump from speculators hoping they can sell enough of these assets to turn things around. At this point, looking at the balance sheet, I am thinking they are in a really difficult situation. They burning operating cash at a rate of approx. $1.5MM a quarter and have a cash balance remaining of $2.7MM. In addition, the assets they are selling are going to pay back some debt and have contingencies that go with the sales. That means the assets aren’t turning into immediate cash as in some cases they are payment plans or other contingencies. It looks to me like they are going to have to dilute, and fast. Finally, the company is running an accumulated deficit of ($143MM). I see no scenario where this balance ever gets back to break even or positive for shareholders.

Another concerning aspect I found was the number of lawsuits where this company is listed as the defendant. It looks like there are about 8 where the company is listed as defendant and 11 total cases pending in their 10-Q notes. That seems awfully high for such a small company. Two additional important sections from the recent 10-Q:

“As of March 31, 2014, we had a working capital deficit of $7.7 million of which $1.2 million is non-recourse to the parent company, GreenHunter Resources, Inc. While we are generating increasingly significant revenues from our water management activities, we have continued to experience losses from our ongoing operations (but at a significantly reduced level), which raises doubt about our ability to continue as a going concern. Additionally, we were not in compliance with certain existing debt covenants contained in our secured debt agreements as of December 31, 2013. We obtained waivers from two of our lenders for the non-compliance in our debt covenants for the year ending December 31, 2013, and for an additional grace period for the year ending December 31, 2014 from one of the lenders. The covenant’s terms as defined by the other lender are less restrictive, and we believe we will be in compliance at the covenant’s next measurement date at December 31, 2014.”

The going concern statement is a bit strange. It’s like they are attempting to water it down by saying “yeah, but things are getting better!!”. The second part about not being in compliance with their debt covenants should definitely worry shareholders.

“On May 14, 2007, we acquired an inactive 18.5 megawatt (“MW”) (nameplate capacity) biomass plant located in Southern California. The plant is owned by our wholly-owned subsidiary, GreenHunter Mesquite Lake, Inc. (“Mesquite Lake”), which was formed for the purpose of operating and owning assets which convert waste material to electricity. For multiple reasons, Management subsequently determined that development of this project was not practicable. We obtained an independent evaluation of the asset’s salvage value as of December 31, 2012, which was $2.0 million. The total carrying value of the project net assets prior to recording an impairment to its value was $17.9 million. The Company recorded an impairment of asset value of $12.9 million at September 30, 2012 and a further impairment of $3.0 million to reflect its salvage value at December 31, 2012. We recorded no impairments during 2013. On December 23, 2013, the Company entered into a letter of intent to sell the biomass plant, which included a non-refundable fee of $25 thousand that granted the buyer an exclusive right to purchase the property through February 15, 2014. On February 19, 2014, GreenHunter Mesquite Lake entered an agreement to sell the Mesquite Lake Biomass Project to ML Energy Park, LLC for $2.0 million. The closing is scheduled for March 15, 2015. The prospective buyer made an initial payment of $50 thousand as earnest money deposit and has continued to pay $50 thousand per month to date and is required to continue monthly payments for a year or until deciding to ultimately purchase the property. The monthly payments and the initial $25 thousand fee are non-refundable, but will be applied to the purchase if it is ultimately consummated. As of March 31, 2014, we have received $125 thousand of non-refundable earnest money deposits. The biomass assets were classified as held for sale at March 31, 2014. The previously reportable Biomass segment is being reported as part of discontinued operations.”

I know the purchase of these assets took place in 2007. But the impairment that was taken was pretty enormous ($15.9MM). Not exactly what I would call awe inspiring. It’s my belief that this firm has serious going concern issues. AVOID.

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Member Avatar mmmed (29.21) Submitted: 1/1/2014 9:10:27 PM : Underperform Start Price: $1.06 GRH Score: -8.96

no profit in sight

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Member Avatar thestockstalker (< 20) Submitted: 1/7/2009 10:03:31 PM : Outperform Start Price: $4.34 GRH Score: -193.38

In the long run, the green movement will most likely be successful in replacing fossil fuels out of necessity. I am not saying GRH will be on the forefront of this movement, but it's share price will, without a doubt, benefit from such a scenario.

Wait until oil starts going back up...

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Member Avatar klemsonkrash (39.02) Submitted: 12/1/2008 5:37:16 AM : Outperform Start Price: $6.00 GRH Score: -209.72

I have been tracking this compnay for a while and it is the future of Alternate Energy. They are making all the right moves and while they have hit a big block in the market downturn, this is a company to watch for the long haul.

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Member Avatar genesson (< 20) Submitted: 11/12/2008 5:49:21 PM : Outperform Start Price: $8.00 GRH Score: -217.86

The founder of the company, Gary Evans, has a very good track record. He knows what industries will show a profit in the long run.

His last company Magnum Hunter sold for 2.1 billion 3 yrs ago.

With all the interest in renewable fuels, and green electricity as evidenced by the various credits and state laws promoting renewables, Green hunter will out perform the market in a few years.

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Member Avatar gotjm3 (< 20) Submitted: 10/28/2008 3:34:57 PM : Outperform Start Price: $5.27 GRH Score: -196.26

Assuming Obama wins, alternative energy and renewable resources will be rewarded and government incentives will grow. Also, eventually, oil prices will rise making this a good play to hedge downturns in consumer markets caused by spikes in energy costs.

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Member Avatar blainesmith (< 20) Submitted: 10/11/2008 3:49:07 PM : Outperform Start Price: $6.01 GRH Score: -192.69

While things are not up to speed in the biodiesel production as of yet, the future is bright for this compant based upon global demand for biodiesel and for their ongoing move into the Wind Energy market in Texas. They picked a great time for the Wind Energy market in Texas, as the infrastructure is already complete and online. I happen to have lived in that area (West Central Texas) when the project bragan. There were numerous learning curves with the geology of the land and sitting proper foundations for the Windmills, but that problem has since (5 years ago) been overcome. The management of this comapny seems to have good leadership and looking towards the long haul, rather than the short and fast.

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Member Avatar rkpartnerships (21.57) Submitted: 7/14/2008 12:16:00 PM : Outperform Start Price: $12.32 GRH Score: -154.54

Good resources & good management.

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Member Avatar cold5starstocks (90.10) Submitted: 6/30/2008 6:42:36 PM : Outperform Start Price: $13.75 GRH Score: -150.87

Experiment time... I will pick whatever stocks that are on the cold 5 star list on the last trading day of each month. There is no research involved other what is on the cold 5 star list at the end of each month. Each pick will be for one year. Lets see where this goes...

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Member Avatar ollinBfreely (< 20) Submitted: 6/30/2008 2:30:01 PM : Outperform Start Price: $13.29 GRH Score: -148.55

Owner is founder of XEC... I don't see this one going down much further - they just initiated a buyback of 500K shares too.

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Member Avatar AJL203PSU (< 20) Submitted: 5/30/2008 12:38:19 PM : Outperform Start Price: $20.96 GRH Score: -138.84

Greenhunter is what happens when old oil and gas executives decide to create an alternative energy company. These guys aren't in it to make the world a better place, but to make a profit. This one will be big.

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Member Avatar ghoul101 (61.08) Submitted: 5/28/2008 10:02:06 PM : Outperform Start Price: $21.75 GRH Score: -140.55

This is an all around great alternative energy company. Although the stock is a little bit on the speculative side at the moment, I believe the stock is a lot less speculative than most.
The CEO, Gary Evans, has already taken one company from scratch to greatness, and I believe he will do the same again with GreenHunter energy. GreenHunter Energy also just started production at their Houston based facility this week.
They also have a deal with Mingyang in China for about 48 wind turbines, and also exclusive rights to any wind turbines that Mingyang exports to the US between now and 2012.

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Member Avatar krobin1950 (< 20) Submitted: 5/17/2008 11:55:30 PM : Outperform Start Price: $24.19 GRH Score: -137.24

Green energy should make a jump with oil soaring...

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Member Avatar investingcents (74.04) Submitted: 5/14/2008 12:51:34 PM : Outperform Start Price: $22.10 GRH Score: -137.92

In the short term, oil prices look like they'll stay high, which should bode well for this alternative energy play.

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Member Avatar 7kilroy7 (27.40) Submitted: 5/13/2008 11:41:47 PM : Outperform Start Price: $22.74 GRH Score: -138.75

Nice diversity!

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Member Avatar johnearl12 (< 20) Submitted: 5/4/2008 9:09:18 PM : Outperform Start Price: $23.50 GRH Score: -138.87

This is a three prong green energy company. (solar, wind and biodeisel) What Gary Evans has done in 1 year is amazing. Read his March 08 presentation to Wall Street. Read about his management and past history. He expects to create a 2 billion dollar company in 3-4 years. (He sold his first 2.4 billion dollar company a few years ago)He might do it in less. The stock can not be purchased by the big boys since there is very little float. Once they are able to purchase, this will be one of the hottest stocks in the market.

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Member Avatar emkFOOL (93.23) Submitted: 4/2/2008 7:04:21 PM : Outperform Start Price: $19.10 GRH Score: -143.03

Diversified renewable sources, contract with SoCal Edison, emerging market, great management.

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Member Avatar INSBIZ (< 20) Submitted: 2/29/2008 10:07:58 PM : Outperform Start Price: $20.00 GRH Score: -147.28

GRH had strong basic fundamentals and are uniquely positioned in a market where demand is strong. In April '08 they will start production in their latest addition to an already well managed portfoio of renewable energy ventures. GRH will begin production of Biodiesel and will operate the largest biodiesel refinery in the U.S. located in Houston Tx. The EIA projects the demand for refined biodiesel to increase an average of 24% per year over the next ten years.

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